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Circular Letter N° 328 “International Custody: Interest rates on cash balances in Euroclear”

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Circular N° 328
Circular Annex Date Reference Status Download
328 NO 03.26.2020 International Custody:
Interest rates on cash balances in Euroclear
Valid NO

DEPÓSITO CENTRAL DE VALORES S.A.,
DEPÓSITO DE VALORES

Dear Participants,

The Depósito Central de Valores S.A., Depósito de Valores (DCV) in accordance with the provisions of Numeral 16.1.1, of the current Internal Regulations, informs its depositors of the upcoming changes in the operational model of the International Custody Service and sub-services under the Euroclear Bank infrastructure.

Euroclear Bank has informed that as of March 25th, 2020, it began to charge negative interest rates for the cash balances held in account, in US Dollars and Euro currencies, at the close of each day. This is due to the high volatility of the interest rate in the European economy; they point out that these are part of dynamic measures as long as the market demands it.

Rates for balances maintained (annually):

EIn Dollars (USD):
For all amounts -0.3%
In Euros (EUR):
Less than or equal to 50 million -0.7%
Between 50,000,001 and 100 million -0.9%
And greater than 100,000,001 million -1.1%

This change will involve:

  • The direct transfer of collections made by Euroclear Bank, with a lag of one month, to clients who use the International Custody Service, FundSettle and Foreign Stock Market sub-services.
  • Sending funds with a 24-hour value for USD and EUR currencies. In other words, the sending of funds to DCV’s accounts (held at Euroclear Bank) for purchase operations under Euroclear’s infrastructure (excluding FundSettle) will be scheduled the day before the settlement date, with the transfer taking place the following day. The foregoing as an alternative to reduce the impact of potential costs for maintaining a cash balance.

For those cases in which the funds are scheduled and sent the same settlement day, they must meet the following cut-off times:

Currency Cut off time to receive credited funds (Santiago de Chile Time)
USD 11.30
EUR Only the 24-hour value option

We remind you that, if you do not respect the schedules, the operations will be exposed to not complying with the payment in a timely manner, thus, continuing the next day.

For more information, contact the Commercial Area
This email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it.

Without further ado, sincerely,    

DEPÓSITO CENTRAL DE VALORES S.A.,
DEPÓSITO DE VALORES

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