1. Working Group # 3 –Settlement: Principles 8 soundness of the settlement, 9 monetary settlements and 10 physical deliveries

2. 1.What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle. 2. To have a legally defined point in time in which the transaction is deemed to be irreversible, preferably, within the rule of law. This must also be included in the CSD’s manuals, including a settlement model with a payment methodology (gross in real time, STP, etc. Working Group # 3 Settlement: Principles 8 soundness of the settlement

3. 2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced? 2. The sheets with all transactions at the CSD and the settlement status in the system in order to support the settlement on the agreed date, which according to regulations is the time when it becomes irreversible. The day to day statements of the participants. This permits the observation of the securities and cash flows showing its application on the date agreed for the transaction. Closing statements at the end of the day. Working Group # 3 Settlement: Principle 8 soundness of the settlement

4. 3. What “result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 3. The result must be the acceptance of this practice on the part of the market, and its application at a general level for the settlement of all transactions performed. Otherwise, the principles would not be 100% applicable. Working Group # 3 Settlement: Principles 8 soundness of the settlement

5. 4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle(s), for example in times of market or operational distress? 4. The most critical risk for us is to be able to maintain the IT platform operational in case of any contingency, since it is a critical service for the market. Mitigating this risk guarantees a proven redundancy level, as well as supervised by the regulating bodies through a BCP, BIA, DRP. Working Group # 3 Settlement: Principles 8 soundness of the settlement

6. 1.What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle. 1. Compliance lies with the settlement of funds performed through the Central Bank Know the depository’s users and customers and their obligations Working Group # 3 Settlement: Principle 9 monetary settlements

7. 2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced? 2. Depending on the model that was implemented, a form of evaluation could be the cash reports presented by the Central Banks’ and CSD’s settlement systems where the balances of cash accounts are presented. Non discretional manner of complying with the settlement time schedules. When dealing in foreign currencies, the settlement schedule must be clearly determined in the Manual for all participants; so as to be able to have access to the funds as soon as possible. There must be some regulation for determining if it is mandatory or not for the depository to grant any type of credit. Working Group # 3 Settlement: Principle 9 monetary settlements

8. 3. What “result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 3. Percentages of settlement defaults with a tendency to reduce them (DVP, exercising rights) All transactions must be recorded for each participant; so that it might be cross- checked with the transactions that have been recorded and settled by the CSD. Clear and exact legislation through the signing of contracts by all participants. Working Group # 3 Settlement: Principles 9 monetary settlements

9. 4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle (s), for example in times of market or operational distress? 4. Have clear and written procedures to determine responsibilities, schedules and accountabilities. Establish BCP, DRP and BCM. Reach agreements on the levels of service between the users. Working Group # 3 Settlement: Principle 9 monetary settlements

10. 1.What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle. 1. The obligation to dematerialize securities which does not depend on the CSDs; but on the regulatory bodies. Working Group # 3 Settlement: Principle 10 physical deliveries

11. 2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced? 2. The number of transactions performed with physical securities vs. dematerialized. The balance in the vault, balances and settlement between the participants. Account statements, bookkeeping, acknowledgement of receipt. The cost involved with the handling of physical securities (insurance policies) Working Group # 3 Settlement: Principle 10 physical deliveries

12. 3. What “result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 3. Attain dematerialization in order to save costs and avoid all risks and controls necessary to handle physical securities. Working Group # 3 Settlement: Principle 10 physical deliveries

13. 4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle (s), for example in times of market or operational distress? 4. As long as physical (paper) securities exist we will not be able to follow this principle. Several aspects, such as security, vaults, the cost of insurance policies, amongst others, must be covered. Working Group # 3 Settlement: Principle 10 physical deliveries