1. SVS - Chile TENDER OFFER AND CORPORATE GOVERNANCE LAW: CHILEAN NEW SET OF RULES TO INTEGRATE THE GLOBAL MARKETPLACE ALVARO CLARKE DE LA CERDA SUPERINTENDENTE DE VALORES Y SEGUROS DE CHILE APRIL 2000

2. TENDER OFFER AND CORPORATE GOVERNANCE LAW THE KEY QUESTION: How the Chilean securities market will integrate the global financial capital markets in the years to come? SVS - Chile Tender offer and corporate governance

3. MAINLY THROUGH TWO ACTIONS: 1)DEREGULATION: Capital controls Taxes 2)CHANGES IN OUR SECURITIES AND COMPANY LAW TO INTERNATIONAL STANDARDS: Tender offers and corporate governance law SVS - Chile Tender offer and corporate governance

4. NEW REGULATION: THE KEY PROBLEM How to align the incentives of controllers (managers) and the other shareholders, sharing the company’s creation of value, in a fair and equal basis? or which is the same as to How to lower the incentives of the “insiders” to extract value from the outsiders due to their privilege position. SVS - Chile Tender offer and corporate governance

5. THE THREE CONFLICT AREAS 1)Major corporate events: takeovers 2)Transfer pricing 3)Insider trading SVS - Chile Tender offer and corporate governance

6. NEW REGULATIONS: THE KEY SOLUTIONS 1)Tender offers:Mandatory bids 2)Corporate governance:Directors duties 3)Insider trading:Information disclosure SVS - Chile Tender offer and corporate governance

7. I.TAKEOVERS 1)Control premium 2)Tender offer rule 3)Information disclosure SVS - Chile Tender offer and corporate governance

8. II.TRANSACTION AMONG AFFILIATES 1.Approval without vote of directors with conflict of interest 2.Indepent appraisal submitted to the market 3.Information disclosure for at least 20 working days 4.Shareholders right to call for a shareholder’s meeting approval SVS - Chile Tender offer and corporate governance

9. III.INSIDE INFORMATION Mayor corporate events: 1.Take overs: Information disclosure Mayor stakeholders 2.Transaction with affiliates: Market transparency 3.Increased sanctions SVS - Chile Tender offer and corporate governance

10. CORPORATE GOVERNANCE Directors Committee  Treatment of directors with conflict of interest  Increase self-regulatory within the company  Independent directors  Annual meetings supervision SVS - Chile Tender offer and corporate governance

11. ADDITIONAL PROTECTION FOR NON CONTROLLING SHAREHOLDERS 1.More resources to regulatory body (SVS) 2.Strengthen rights of withdrawal * Ownership concentration above 66% 3.Increase voting quorum approval * Mayor corporate events 3/4 shares SVS - Chile Tender offer and corporate governance

12. ADDITIONAL PROTECTION FOR NON CONTROLLING SHAREHOLDERS 4.Limit share issues with extra voting rights 5.ADR’s has same voting rights as shares 6.Increase sanctions for inside information SVS - Chile Tender offer and corporate governance

13. CONCLUSIONS 1.Harmonisation is crucial to play a role in the global financial market. 2.Today’s regulation asymmetries between banking and capital markets are lowered. 3.Market consensus about the need of this new framework takes time. SVS - Chile Tender offer and corporate governance