On April 29, within the framework of the operational difficulties caused by the COVID-19 crisis, the Central Bank of Brazil extended the deadline for financial institutions to submit certain documents with information on “prudential regulation”. To access the circulars, click here and here.
The extension applies to the submission of the Market Risk Declaration (DRM, in Spanish), the Operational Limits Declaration (DLO, in Spanish) and the Internal Capital Adequacy Assessment Processes (Icaap, in Spanish) as follows:
- The deadline for submitting the DRM has been moved to the last day of the next month after the base date for documents relating to the April-November 2020 base dates.
- The deadline for submitting the DLO has been extended to the twentieth day of the second month following the respective base date, for documents relating to the base dates of March-November 2020.
- The Internal Capital Adequacy Assessment Process (Icaap) and the Internal Simplified Capital Adequacy Assessment Process (IcaapSimp) may be submitted until June 30, 2020.
The DRM summarizes exposure to the various market risk factors associated with the operations held by financial institutions, while the DLO provides information on the prudential regulations of financial institutions. Icaap and IcaapSimp, meanwhile, enable the ‘adequacy’ of the capital held by the institution to be evaluated over a three-year period, taking into consideration variables such as risk levels and degree of competitiveness, among others.