6th ACSDA International Seminar 6th ACSDA International Seminar

Punta del Este, Uruguay - October 27-28, 2004Punta del Este, Uruguay - October 27-28, 2004

CBLCCBLCBrazilian Settlement and Depository Models for Brazilian Settlement and Depository Models for

International InvestmentInternational Investment

Brazil & Mexico - Integration ModelBrazil & Mexico - Integration Model

Agenor Silva JuniorAgenor Silva Junior

October 28, 2005October 28, 2005

General guidelines• Since November 2004, BOVESPA, BMV, CBLC and INDEVAL

have been working together to set a integration model between Brazil and Mexico

• This presentation intends to explain the current model for international investments in Brazil and to explore the new integration model between Brazil and Mexico

Settlement FlowSettlement Flow

International Investors Settlement – Abroad Flow

CBLC/Bovespa

International Broker

Local Broker Local Custodian

Global CustodianAsset /

InternationalInvestor 1. Order

2. Repass Order

Desk

Phone

Bloomberg

Email

4. Reports trade

7. Settlement

Instructions

SWIFT – 54X

Brazilian FlowBrazilian Flow

3. Reports trade

Desk

Phone

Bloomberg

Email3’. Reports trade and

ask for allocation

Back Office

Email

5’. Allocation Process

Back Office

Email

5. (If Asset) Allocation ProcessOMGEO / Phone

6. Settlement Instructions

6’. Settlement Instructions Back Office Email / Fax/File

8. Inform inconsistencies

SWIFT – 54X/

Phone

8’. Inform inconsistencies Email / Fax

8’’. Inform inconsistencies

Email

9. Confirm Settlement Back Office Phone/Email

9’. Confirm Settlement

Back Office

Swift/Email

XML Message provided by CBLC / BOVESPA

International Investors Settlement – FOREX Flow

CBLC

International Broker

Local Broker Local Custodian

Global CustodianAsset /

InternationalInvestor ExchangeExchange

FX Bank FX Bank

Clearing Agent

Exchange Exchange

Exchange

Exchange Exchange

Exchange

Payment Payment

Payment

Depository Flow

IssuerGlobal Custodian

Local Custodian

CBLC / Bovespa

International Investor

6. Instructs voluntary corporate actions

5. Informs corporate actions

3. Notifies corporate actions

2. Informs corporate actions

9. Process and informs corporate actions

10. Process and informs

corporate actions

8. Instructs voluntary corporate actions

7. Instructs voluntary corporate

actions (MT 565 or MT 568)

4. Notifies corporate

actions (MT 564 or MT 566)

International Investor Corporate Actions Information Flow

1. Informs corporate actions

Transfer Agent

8’. Instructs voluntary corporate actions (option)

International Investor Corporate Actions Payment Flow

1. Informs payment values

IV. LDL008R2II. LDL008

III. LDL008R1

VI. LDL009R1

VII. LDL009R2

CBLC

4. Confirms credit of

funds

Local Custodian

STRV. LDL009

I. LDL007

Issuer´s Bank

3. Confirms credit of

funds

(MT 566)

International Investor

Global Custodian Local Custodian´s Bank

2. Confirms credit of funds

Integration Model

Trading, Settlement and Depository Flow

Integration Model• Orders

– Mexican broker pass the order to the correspondent Brazilian broker in Brazil

• Allocation Process– Correspondent Brazilian broker allocates the delivery/receive of shares at the Mexican investor

´s account that is under responsibility of a Local Custodian • According Brazilian rules the Local Custodian could be CBLC or any other Brazilian custodian

• Settlement– Same settlement procedures as usual

– The Mexican Broker give the instruction to the local custodian for settlement (delivery versus payment)

– The foreign exchange procedures is made by the Mexican Broker with the guaranty of the Local Custodian

• Depository– The shares will be register and kept at the Mexican investor´s account under the Local

Custodian responsibility

MEXICO

BRAZIL

Mexican InvestorMexican

Broker

Indeval

Depository

Brazilian

Broker

Local Custodian (CBLC/others)

CBLC Clearing and Depository

1

Order

(*) Infornation about the mexican investor, Mexican na Brazilian Broker

BOVESPA

3Execute

order

Settlement Instructions

6

Match the instructions and autrorizes the

trade

7

8 CBLC process the settlement

2Repass order and inform CBLC´s account number

10

Deliver brazilian shares at the mexican broker´s account

5

Settlement Instructions 9 Inform delivery of brazilian shares for the mexican investor and receive

confirmation ( SWIFT)

9

4c

Allocation Process

4bReports trade

4a

Reports trade

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