Press Release December 23, 2014

This new scheme developed between the Santiago Stock Exchange and Depósito Central de Valores (DCV), will allow foreign investors to participate in the Latin American Integrated Market (MILA) and handle their custodians through a single institution in Chile.

Within the context of the development of the Latin American Integrated Market (MILA) the Santiago Stock Exchange and Depósito Central de Valores presented a new instructional manual regarding custodians, which will allow foreign investors to use their global custodians in Chile and manage them in a consolidated way.

“This alternative to the current custody model will allow for the delivery of more operating options and facilitating the access of foreign investors to the equities market in Chile. At the same time, it will provide the opportunity to participate in MILA, maintaining the administration model they currently use”, explained Nicolás Almazán, leader of the MILA Commercial Committee. 

Since the commencement of the Latin American Integrated Market in May 2011, the depositories of member countries (Chile, Colombia, Perú and recently Mexico) have provided foreign investors with the custody service through grouped accounts (omnibus model) in the country of origin of the securities for which they undertake operates through the MILA infrastructure. Using mirror accounts, the securities are reflected in the investor’s country of origin. The scheme, which will remain operational, has been particularly advantageous for those investors who do not have a global custodian.

Through this new system, a foreign investor who wishes to purchase securities listed in the Chilean market shall instruct the operation to a broker who holds a correspondent agreement in Chile, and instruct their international custodian in order to receive the securities. In turn, the foreign broker will enter the purchase order in the negotiation system in the investor’s country of origin, and will request its correspondent in Chile that the securities be transferred to the global custodian designated by the client.

“The incorporation and facilities provided to global custodians constitutes one more step forward on the issues that are being addressed to provide better infrastructure for operations in MILA”, said Javier Jara Traub, DCV Business and Legal Affairs Manager.

For their part, the Santiago Stock Exchange will inform Depósito Central de Valores will report on the realization of the purchase to the Central Securities Depository through the usual mechanisms, retaining the custody under the care of the global custodian.

Instructions: Share of Global Custodians in Chile for MILA