New Infrastructures for OTC Derivatives Central Repository for Forward Contracts November 2011

DCV in figures In detail, Central Repository for Forward Contracts The Derivatives Market in Chile Overview Central Repository for Forward Contracts Background Current issues with existing operating procedures Features of the new service Service model Some statistics Phase 2 & Phase 3 Conclusions

DCV in figures Chile’s national CSD with 18 years of experience in the market 176 participants Shareholders: Pension Funds 27% Banks 27% Santiago Stock Exchange 21% DTCC holding ILLC 10% Life Insurance Cos. 9% Electronic Exchange 5% Others 1% US$ 250 billion under custody in local securities Transactions registered in 2011 (sept): US$1,037 billion Transactions registered in 2011 (sept): 1,2 million Through DCV Registros (subsidiary) maintains Corporation’s shareholders registries Role of NNA, issuing ISINs for Chilean securities International custody services for local participants investing abroad

The Derivatives Market in Chile Overview: Active OTC derivatives market in Chile Forwards (82%) Swaps (18%) Currencies in Forwards Contracts CLP - US dollar (95%) Euro – US dollar (2%) US Dollar – Yen (2%) Others (1%) Volumes in Forwards Contracts Notional amounts: US$ 1,5 billion (daily average) # of CLP – US dollar contracts: 70,000 annual basis Potential new gross income 2012 USD 100,000 2013 USD 150,000 4

Central Repository for Forward Contracts Background: The idea was originated from the need to provide a comprehensive and centralized solution for pension funds / banks regarding their forward contracts: subscription, registration and custody This is an opportunity to generate a new source of funds for DCV We worked together to define the scope, objectives and commitments An agreement between Pension Funds and Banks took place in March 2010; this became the business reason for the project The potential market considers the rest of current participants… and also their institutional customers

Central Repository for Forward Contracts Current issues with existing operating procedures Lack of standard procedures Too many administrative procedures (Too much time-consuming paperwork) Need to keep updated records of representatives authorized to sign the contracts Receiving contracts with inaccurate data Receiving signed contracts several days after the respective operations agreements Involved many operational and financial risks High operating costs 6

Central Repository for Forward Contracts Features of the new service Electronic and centralized subscription, registration and custody Official legal record Digital certificate with an advanced electronic signature Control of expiration dates On-line information (100% reliable) Pension Fund Services: Daily reports to the Pension Funds Superintendence STP with the Electronic Stock Exchange

Central Repository for Forward Contracts

Central Repository for Forward Contracts Some Statistics 21 Participants have adhered the service 8 Participants operating 13 Participants in the road to activate their accounts Up to september 984 contracts registered Up to september 161 contracts matured

Central Repository for Forward Contracts Phase 2: Registration of contracts between a participant and their corporate customers Expanding to other types of Forwards contracts and Swaps Payment instructions to banks Supporting collateral management Phase 3: Interconnection with a CCP, managed by banks

Central Repository for Forward Contracts Conclusions: Service started on last March 15th Smooth incorporation of new participants Aims to build a modern, standard and competitive infrastructure to provide high efficiency and safety levels to the market

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