As Brazil is a final beneficiary owner model, BM&FBOVESPA collateral management system accounts are segregated by each beneficiary owner in specific Custody Accounts. The system updates investor positions on a real-time basis.
The deposit of collateral overseas is available for trades with BM&FBOVESPA equities markets. This procedure is available for non-resident investors depositing collateral in BM&FBOVESPA accounts with DTCC (The Depository Trust & Clearing Corporation) and Euroclear.
BM&FBOVESPA Equities Derivatives that 2689 non-resident investors may trade
- Options, forwards and lending of stocks
- Options, forwards and lending of ETFs
- Options of IBOVESPA and IBRX indexes
Eligible Offshore Securities Accepted as Collateral
- U.S Treasury bills, bonds or notes
- Selected ADRs (IBRX Index)
- German Sovereign Debt (Euroclear only)
In valuing the collateral, BM&FBOVESPA applies haircuts of 5% to U.S. Treasuries and 13% to Sovereign Debt of Germany; and on the ADRs at the same rates it haircuts the underlying domestic securities. For further information about accepted stocks (ADRs), current haircuts and limits, please follow the website link.
Detailed information about the BM&FBOVESPA account at DTCC
BM&FBOVESPA´s account number in DTCC = 822
To transfer securities held in any other account at the Fed to the DTC’s Fed account on any business day, the Fed securities movement must always be made by 3:15 p.m. New York time through the Federal Reserve book-entry securities transfer system. Here is how to instruct the movement from their Fed account to DTC's account at the FRBNY.
| DTC's ABA#: |
026002066 |
| DTC's Name: |
DTC SDFS |
| Receiving Account: |
CUST |
| Receiving Bank Info: |
FDO/participant number (Note: this would be the participant that will submit the pledge, not BM&FBOVESPA) |
| Cash Value: |
0.00 |
| Par Amount: |
The quantity of securities to be transferred |
Detailed information about the BM&FBOVESPA account at Euroclear
BM&FBOVESPA’s account number in EUROCLEAR = 98606
To transfer securities held in any other account at the Fed to the Euroclear Fed account on any business day, the Fed securities movement must always be made by 6:30 PM Brussels time. Here is how to instruct the movement from their Fed account to Euroclear's account at JP Morgan Chase.
| Fedwire Format (free of payment) |
| Fed Account: |
021000021 / Cust |
| SPC INS: |
G54115 EURO98606 |
Procedure to deposit collateral offshore
- The investor chooses to pledge to BM&FBOVESPA at either Euroclear or DTC.
- The investor asks its Brazilian broker to apply to BM&FBOVESPA for the client to be allowed to deposit collateral overseas. The investor specifies collateral information to his broker, submitting details including ISIN or CUSIP securities ID, amount, maturity, trade date, settlement date and the counterparty account number.
- In turn, the Broker requests the deposit of collateral by sending instructions to BM&FBOVESPA.
- If the security is accepted as collateral BM&FBOVESPA informs the Broker and the Broker informs the client.
- The investor instructs its custodian bank to deliver the securities to BM&FBOVESPA’s account.
- At DTC, BM&FBOVESPA will be automatically notified when the clients’ collateral is transferred to its pledgee account.
- At Euroclear, BM&FBOVESPA instructs it to receive the securities.
- When the transfer is settled, BM&FBOVESPA collateral management system considers the securities as collateral.
Costs: The costs to BM&FBOVESPA charged by DTCC or Euroclear for the custody of assets are proportionally shared by BM&FBOVESPA’s brokers who request this service and who may transfer these costs to the client.
More info at: www.dtcc.com and www.euroclear.com.
The CMN Resolution 2687 authorizes non-resident investors that only trade agricultural commodities to have some conveniences in terms of settling their transactions and posting collateral offshore.
Customers who are non-resident investors, pursuant to CMN Resolution 2687, settle their transactions carried out in BM&FBOVESPA agricultural markets in U.S. Dollars and post U.S. Treasuries and U.S. Dollars as collateral for their transactions.
BM&FBOVESPA Agricultural Commodity Derivatives that 2687 non-resident investors may trade
Futures and options of arabica and conillon coffee, crystal sugar, ethanol, live cattle, corn and soybeans.
Eligible Assets Accepted as Collateral
- Cash U.S. dollars
- U.S Treasury bills, bonds or notes
Detailed information about BM&FBOVESPA ‘s account for posting collateral
BM&FBOVESPA’s cash account in Citibank = 40804863
BM&FBOVESPA’s securities account in Citibank = 093380
| Chips = |
0008 |
| ABA = |
021000089 |
| Swift = |
CITIUS33 |
Detailed information about BM&FBOVESPA ‘s account for settlement
BM&FBOVESPA’s account in Citibank = 40804898
- The investor requests to its Brazilian broker the deposit of dollars as collateral.
- The broker requests to BM&FBOVESPA the deposit of dollars as collateral.
- The investor transfers the dollars to BM&FBOVSPA’s cash account with Citibank.
- As soon as Citibank confirms the deposit, BM&FBOVESPA considers it as collateral.
- The broker is notified by the collateral management.
Procedure to deposit U.S. Treasuries as collateral
- The investor requests to its Brazilian broker to apply to BM&FBOVESPA for the client to be allowed to deposit collateral overseas. The investor specifies the intended collateral to his broker, submitting details including, ISIN or CUSIP securities ID, amount, maturity, trade date, settlement date and the counterparty account number.
- In turn, the Broker requests the deposit of collateral by sending instructions to BM&FBOVESPA.
- If the asset is accepted as collateral, BM&FBOVESPA informs the Broker and the Broker informs the investor.
- The investor instructs its custodian bank to deliver the securities to BM&FBOVESPA’s account.
- BM&FBOVESPA instructs Citibank to receive the securities.
- When the transfer is settled, BM&FBOVESPA considers the asset as valued collateral, segregated in the client’s custody account.
Costs: The costs charged by Citibank for the custody of assets are transferred for the brokers at the discretion of BM&FBOVESPA.
