Special Pledge -Description

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According to Law No. 20,956 published on October 26th, 2016, a set of measures were established to boost productivity, and thus the economy’s development. This law, highlighted among other things, the amendment to Law No. 18,876, whose purpose was to simplify the establishment of guarantees on securities deposited in custody companies (incorporated under the aforementioned Law), therefore reducing their costs and facilitating their execution. For that purpose, this law created a new type of pledge on securities in deposit service which consists in having securities registered in a book entry system called “Special Pledge”.

The most relevant features of this new Special Pledge service are the following:

The Depósito Central de Valores (DCV) makes available the “Special Pledge Service on Securities on Deposit”, whose implementation considered two stages:

  1. In the first stage, in 2017, through the SWIFT channel, the Service was implemented only for operations between the Central Bank of Chile (BCCH) and Depositors that belonged to banking companies. The operations involved the use of one or more credit lines in the national currency (with a pledged security), according to the standards published by the BCCH on November 8th, 2017, in the Official Gazette.
  2. n the second stage, in 2018, the instructions channel (which deals with securities’ registrations and pledge cancellations) was implemented by means of an incoming file mechanism and a web interface for instructions and queries. This new channel is available to all DCV’s Depositors who have signed the master agreement.