Depósito Central de Valores (DCV) released a new service for participants. As of March participants may perform contributions and redemption of mutual fund instalments with financial instruments in DCV directly with the issuer, or through the submission of a basket of distinct securities as defined in the regulation of each mutual fund.

Isabel Fernández, Business Project Assistant Manager, explains the continuous improvement DCV has performed to develop the necessary infrastructure to deliver this service, along with the changes to the rules by the regulator. This is because until 2012, the purchase and sale of mutual fund instalments was carried out only with cash. The launch of the first ETF in the national market by Itaú AGF in 2013 allowed completing the contribution and redemption through baskets of instruments comprising the IPSA index.

“In this moment, arrangements are being made with the Superintendence of Securities and Insurance (SVS) in collaboration with our participant Itaú AGF to make changes to the regulation in order to include this business model in the mutual fund rules, where the investor may make contributions and redemptions of mutual fund instalments directly with the issuer, delivering or receiving a basket of instruments. This operation may be performed directly in DCV or in the stock exchange through a settlement agent. For DCV it involved significant work”, she stated.

Advancements in the securities market prompted modifications to the Single Fund Act (LUF), so in 2015, DCV reviewed the service enlarging its coverage to any mutual fund instalment without being exclusive of the ETF type.

“When carrying out  investments through this service, DCV ensures the delivery (of the instalments) against delivery (of the instruments), also called DVD (delivery versus delivery), so at no time do the investor and the issuer remain without the proper support of their assets, whether these are instalments or instruments.  

This is relevant as it allows minimizing the risk because the investor’s basket of instruments never leaves its control until the operation settlement day”, indicated Isabel Fernández.

The executive held that a successful trial run was performed with controlled operations carried out by Security AGF and the procedures, client’s manuals and protocols for the operation of the service have already been defined.