Contrato de Netting | B3

Lower credit risk

Agreements between two institutions can be registered at B3

The Netting Agreement seeks to reduce risk from one party’s credit exposure to another party as a result of transactions between the two, in such manner that upon maturity and after clearing the value that the borrower effectively owes to the lender can be identified. It is used frequently in transactions involving derivatives, among other types of financial transactions.


National Monetary Council Resolution 3.263 of February 24, 2005 establishes the conditions of validity of the netting agreement within the scope of the national financial system, among which is the condition that it must be registered with B3 within 15 business days of its signature. B3 also allows a digital version of the hard copy of the netting agreement signed by the parties to be submitted together with the registration request.


In relation to this, article 119, subparagraph VIII, of Law 11.101, of February 09, 2005, more commonly known as the New Bankruptcy Law, stipulates that the “if there is agreement for the clearing and settlement of obligations within the scope of the national financial system, pursuant to the prevailing legislation, the non-bankrupted party can consider the agreement to have matured early, in which case it will be settled as set forth in regulations, accepting the clearing of any credit that comes to be calculated in favor of the bankrupted  party with credits  held by the contracting party.”

 

By enacting these rules the government has sought to promote a more secure legal environment, allowing reduced financial funding costs (interest rates) in the local market.