New York and Santiago, August 25, 2010 – The Depósito Central de Valores, S.A. (DCV) of Chile and The Depository Trust & Clearing Corporation (DTCC) of the U.S. announced today they have signed an agreement that recognizes and strengthens their relationship and will serve as a basis for future collaboration.
The objective of this cooperative undertaking, which will leverage the technology and expertise of both organizations, is to expand offerings and capabilities of DCV and DTCC. This will enable both organizations to take advantage of local market knowledge to develop broader offerings in Chile and throughout Latin America, while reducing risk and lowering costs.
"Chile has one of Latin America's strongest economies, and represents a strong and growing financial market in the Americas," said William B. Aimetti, President and Chief Operating Officer of DTCC. "We are delighted to have this opportunity to take the relationship with Chile’s central securities depository to a new level, and we look forward to collaborating with our Chilean colleagues in helping them address the needs of their markets and supporting their customers."
"We believe this working relationship will give DCV some strategic advantages in fulfilling our own mission of making the Chilean capital markets more efficient and more attractive to capital market growth," said Fernando Yáñez, Chief Executive Officer of DCV. "We look forward to leveraging the expertise, technology, scale and global reach of DTCC to assist in the growth of services for capital markets throughout Latin America."
Early discussions have identified some possible areas of collaboration tied to operational risk and business continuity. For example, DCV currently has data centers in separate locations in Santiago, the capital and largest city of Chile; however, communications with the back-up site located 500 kilometers away in Concepción City were disrupted and went offline during the February 2010 earthquake. DCV and DTCC believe there may be an opportunity to collaborate on business continuity, leveraging DTCC’s own experience post- 9/11 in establishing redundant back-up data centers.
The agreement announced today developed following an invitation in December 2009 by DCV to DTCC to make a 10% equity investment in DCV and join the DCV Board. In making this investment and joining the DCV Board, DTCC has expressed its commitment to the region and high expectations for future cooperative efforts with DCV.
DCV and DTCC have a long and valued relationship, and share a considerable history of collaboration. DCV has been a participant in DTCC’s depository subsidiary, The Depository Trust Company (DTC), since 2007. This membership permits DCV to extend to its customers the benefit of having DTC service the underlying assets for DCV’s Chilean customers, including cross-border settlements with other DTC participants, and transact both free-of-payment and delivery-vs.-payment (DVP) business in DTC-eligible issues.
In addition, DCV and DTCC are also among the founding members of the Americas’ Central Securities Depositories Association (ACSDA), an industry organization formed over a decade ago that provides a forum for issues affecting securities depositories, such as best asset servicing practices, globalization trends in markets and instruments, technology standards and risk management.
DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at US$33.9 trillion. In 2009, DTCC settled nearly US$1.48 quadrillion in securities transactions. DTCC has multiple operating facilities and data centers in the United States and overseas.
DCV is located in Santiago and serves multiple national exchanges and the over-the-counter (OTC) market as well. DCV is principally owned by member banks, pension funds, insurance companies and the three Chilean Stock Exchanges (the Santiago, Electronic and Valparaiso). It holds securities worth US$214 billion. DCV has 166 direct participants, including banks, brokers, pension funds, mutual funds and insurance companies. It processed trades worth US$0.9 trillion in 2009. For more information on DCV, visit www.dcv.cl.
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