Download Brazilian Settlement and Depository Models for International

6th ACSDA International Seminar
Punta del Este, Uruguay - October 27-28, 2004
CBLC
Brazilian Settlement and Depository Models for
International Investment
Brazil & Mexico - Integration Model
Agenor Silva Junior
October 28, 2005
General guidelines
• Since November 2004, BOVESPA, BMV, CBLC and INDEVAL
have been working together to set a integration model between
Brazil and Mexico
• This presentation intends to explain the current model for
international investments in Brazil and to explore the new
integration model between Brazil and Mexico
Settlement Flow
International Investors Settlement – Abroad Flow
Global Custodian
Asset /
International
Investor
6. Settlement
Instructions
5. (If Asset) Allocation Process
OMGEO / Phone
International Broker
1. Order
4. Reports trade
7. Settlement
Instructions
SWIFT – 54X
CBLC/Bovespa
8. Inform
inconsistencies
8’’. Inform
inconsistencies
Email
SWIFT – 54X/
Phone
9’. Confirm
Settlement
2. Repass
Order
5’. Allocation
Desk
Process
Phone
Back Office 3. Reports
Bloomberg
Email
trade
Email
Desk
Phone
Bloomberg
3’. Reports
Email
trade and
ask for
allocation
Back Office
Email
Back Office
Swift/Email
Brazilian Flow
Local Custodian
Brazilian Flow
XML
Message
providedBack
by CBLC
/ BOVESPA
6’. Settlement
Instructions
Office Email
/ Fax/File
8’. Inform inconsistencies Email / Fax
9. Confirm Settlement Back Office Phone/Email
Local Broker
International Investors Settlement – FOREX Flow
Global Custodian
Exchange
Asset /
International
Investor
International
Broker
Exchange
Exchange
Exchange
CBLC
FX Bank
FX Bank
Exchange
Exchange
Exchange
Exchange
Payment
Clearing Agent
Local Broker
Local Custodian
Payment
Payment
Depository Flow
International Investor
Corporate Actions Information Flow
Global Custodian
6. Instructs voluntary
corporate actions
Issuer
International
Investor
5. Informs corporate
actions
7. Instructs
voluntary
corporate
actions (MT
565 or MT 568)
4. Notifies
corporate
actions (MT 564
or MT 566)
1. Informs corporate
actions
CBLC /
Bovespa
Local Custodian
3. Notifies corporate
actions
8. Instructs voluntary
corporate actions
2. Informs corporate
actions
9. Process and informs
corporate actions
8’. Instructs voluntary corporate
actions (option)
10. Process
and informs
corporate
actions
Transfer Agent
International Investor
Corporate Actions Payment Flow
CBLC
Issuer´s Bank
International
Investor
I. LDL007
III. LDL008R1
4. Confirms
credit of
funds
1. Informs
payment
values
IV. LDL008R2
STR
II. LDL008
V. LDL009
VI. LDL009R1
Local Custodian
Global Custodian
VII. LDL009R2
3. Confirms
credit of
funds
(MT 566)
2. Confirms credit of
funds
Local Custodian´s
Bank
Integration Model
Trading, Settlement and
Depository Flow
Integration Model
• Orders
–
Mexican broker pass the order to the correspondent Brazilian broker in Brazil
• Allocation Process
–
Correspondent Brazilian broker allocates the delivery/receive of shares at the Mexican
investor´s account that is under responsibility of a Local Custodian
•
According Brazilian rules the Local Custodian could be CBLC or any other Brazilian custodian
• Settlement
–
–
–
Same settlement procedures as usual
The Mexican Broker give the instruction to the local custodian for settlement (delivery versus
payment)
The foreign exchange procedures is made by the Mexican Broker with the guaranty of the Local
Custodian
• Depository
–
The shares will be register and kept at the Mexican investor´s account under the Local
Custodian responsibility
Deliver brazilian shares at the mexican broker´s account
10
Mexican
Broker
Mexican Investor
1
Depository
Settlement Instructions
9
Reports trade
Repass order and inform
CBLC´s account number
Indeval
5
Order
4b
6
9
Settlement Instructions
Inform delivery of brazilian shares
for the mexican investor and receive
confirmation ( SWIFT)
BRAZIL
2
Local Custodian
(CBLC/others)
Brazilian
Execute
MEXICO
Broker
3
order
4a
7
Reports trade
4c
Match the
instructions
and autrorizes
the trade
Allocation Process
CBLC Clearing and Depository
BOVESPA
8
(*) Infornation about the mexican investor, Mexican na Brazilian Broker
CBLC process the settlement
www.cblc.com.br