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| Circular Letter N° 310 | ||||||||||||||
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DEPÓSITO CENTRAL DE VALORES S.A., Dear Participants Depósito Central de Valores (DCV) would like to inform you of the launch of the new “Special Pledge Service for Securities on Deposit”, hereinafter “Special Pledge”, contained in Article 14, letter b) et seq., of Law 18,876. In this first phase, the Service will be available for operations executed by the Central Bank of Chile (BCCH) with Depositors from banking companies, concerning their use of one or more liquidity credit lines in local currency, with collateral, according to the rules published by the BCCH in the Official Gazette on November 8th, 2017, and specifically, in Chapter 2.3 of its Compendium of Monetary and Financial Rules, which effective date shall be timely communicated by said Issuing Institution. According to Law 18,876, in order to access this service, Depositors must execute the Master Agreement and the relevant adhesions thereof, which text and format is recorded under No. 944, dated October 16th, 2017, in the Notary Office of Santiago of Mr. Juan Ricardo San Martin Urrejola, under repertory No. 55980/2017 (a link to access a copy thereof is attached hereto). We note for the record that the Special Pledge Service will make it possible to operate under the following characteristics: i. he Depositors corresponding to banking companies and having access to operations related to the use of liquidity credit lines in local currency with collateral from the BCCH, may secure –once said rule becomes effective and the relevant credit facility agreements are executed with said Entity- these operations with the Special Pledge Service provided by DCV. ii. The definition of the securities eligible to be pledged for these operations will be determined by the BCCH, according to its own regulation. iii. Pledge Creation Process a. Once BCCH has accepted the liquidity funds of a banking company for these operations, according to its regulation, the Issuing Institution shall register a request in DCV for the creation of the relevant collateral, and the banking company shall be responsible for the relevant securities to be available in its DCV account, who shall perform a book entry that, according to the internal regulation, reflects the creation of said special pledge in the relevant commercial bank, in favor of the BCCH, and hence, the securities will be pledged. According to this and to the regulation of the Issuing Institution, the relevant Depositor shall expressly authorize the BCCH to send to DCV the relevant communications and instructions for these purposes, on behalf of and for the Depositor banking company. The format of the mandate required for these purposes shall be disclosed in the near future. b. Once DCV confirms to BCCH the creation of the pledge, the latter –according to the aforementioned regulation- shall pay, in the checking account that the relevant banking company maintains in the Issuing Institute, the relevant funds related to the requested liquidity credit line operation in local currency with collateral. iv. Lifting of Pledges a. On the expiration date of the relevant liquidity credit line with collateral, or of the operation executed according to it, the BCCH shall withdraw from the aforementioned checking account of the banking company the relevant principal and interest amounts, and it will request that DCV lift the relevant securities created for said operation. b. The successful execution of these lifting requests shall imply that the securities pledged in favor of the BCCH are freely available to the relevant commercial bank. Hence, the Pledge shall be lifted. v. In light of the foregoing and according to the regulation of the BCCH, this institution itself, as Depositor of DCV, shall send the messages in its capacity as Pledgee, and on behalf of the relevant banking company in its capacity as Pledgor, who has requested to BCCH access to said operations with collateral, being authorized, along with DCV, to register said operation in the manner stated above. vi. As previously mentioned, both the execution of the Master Agreement and the authorization of the relevant banking companies shall be required to register said operations in BCCH and DCV. A link to access the format of the Master Agreement is attached hereto. It can be sent – in whole – to In due course, DCV will inform of the second phase of this Special Pledge Service, covering other operations of its Depositors. All of this information will also be available at DCV’s webpage www.dcv.cl
For further information, please contact the Customer Service Desk MAC Sincerely, DEPÓSITO CENTRAL DE VALORES S.A., |
