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6th ACSDA International Seminar Punta del Este, Uruguay - October 27-28, 2004 CBLC

6th ACSDA International Seminar Punta del Este, Uruguay - October 27-28, 2004 CBLC Brazilian Settlement and Depository Models for International Investment Brazil & Mexico - Integration Model Agenor Silva Junior October 28, 2005. General guidelines.

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6th ACSDA International Seminar Punta del Este, Uruguay - October 27-28, 2004 CBLC

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  1. 6th ACSDA International Seminar Punta del Este, Uruguay - October 27-28, 2004 CBLC Brazilian Settlement and Depository Models for International Investment Brazil & Mexico - Integration Model Agenor Silva Junior October 28, 2005

  2. 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

  3. Settlement Flow

  4. 5. (If Asset) Allocation Process OMGEO / Phone 1. Order 6. Settlement Instructions 4. Reports trade 7. Settlement Instructions SWIFT – 54X 2. Repass Order Desk Phone Bloomberg Email 5’. Allocation Process Back Office Email CBLC/Bovespa 3. Reports trade Desk Phone Bloomberg Email 8. Inform inconsistencies SWIFT – 54X/ Phone 8’’. Inform inconsistenciesEmail 3’. Reports trade and ask for allocation Back Office Email Local Broker 9’. Confirm Settlement Back Office Swift/Email 6’. Settlement InstructionsBack Office Email / Fax/File Brazilian Flow 8’. Inform inconsistenciesEmail / Fax 9. Confirm SettlementBack Office Phone/Email Global Custodian Local Custodian International Investors Settlement – Abroad Flow International Broker Asset / International Investor Brazilian Flow XML Message provided by CBLC / BOVESPA

  5. Asset / International Investor Exchange Exchange Exchange Exchange CBLC Exchange Exchange Exchange Exchange Payment Payment Payment Clearing Agent Global Custodian Local Custodian FX Bank FX Bank International Investors Settlement – FOREX Flow International Broker Local Broker

  6. Depository Flow

  7. International Investor Corporate Actions Information Flow Global Custodian 6. Instructs voluntary corporate actions International Investor Issuer 5. Informs corporate actions 7. Instructs voluntary corporate actions (MT 565 or MT 568) 4. Notifies corporate actions (MT 564 or MT 566) 1. Informs corporate actions 10. Process and informs corporate actions 2. Informs corporate actions Transfer Agent 3. Notifies corporate actions Local Custodian 9. Process and informs corporate actions 8. Instructs voluntary corporate actions 8’. Instructs voluntary corporate actions (option) CBLC / Bovespa

  8. Global Custodian International Investor Issuer´s Bank Local Custodian I. LDL007 III. LDL008R1 II. LDL008 1. Informs payment values IV. LDL008R2 V. LDL009 4. Confirms credit of funds VI. LDL009R1 Local Custodian´s Bank VII. LDL009R2 3. Confirms credit of funds (MT 566) 2. Confirms credit of funds STR International Investor Corporate Actions Payment Flow CBLC

  9. Integration ModelTrading, Settlement and Depository Flow

  10. 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

  11. Deliver brazilian shares at the mexican broker´s account 10 1 5 Order Settlement Instructions 6 9 Inform delivery of brazilian shares for the mexican investor and receive confirmation ( SWIFT) 9 Reports trade Settlement Instructions 4b Repass order and inform CBLC´s account number 2 Execute order 3 Match the instructions and autrorizes the trade 4a 7 Reports trade 4c Allocation Process CBLC process the settlement 8 MEXICO Indeval Depository Mexican Broker Mexican Investor BRAZIL Local Custodian (CBLC/others) Brazilian Broker BOVESPA CBLC Clearing and Depository (*) Infornation about the mexican investor, Mexican na Brazilian Broker

  12. www.cblc.com.br

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