VII International Seminar San Pablo, Brasil November 8th-10th, 2006 The Securities Registrar System and the Investors’ Rights The Argentine Model Norberto Gysin Caja de Valores - Argentina Institutions of the Capital Market – Bolsa de Comercio de Buenos Aires (Stock Exchange) – Mercado Abierto Electrónico S.A. (OTC Market) MERVAL – Mercado de Valores de Buenos Aires S.A. BCBA Domestic – Caja de Valores S.A. MAE Markets – MATBA – ROFEX (Commodities Markets) MATBA C N V ROFEX – Others Stock Exchanges and Markets CVSA – Comisión Nacional de Valores (Regulatory Organism) 2 Market Participants Ministry of Economy Comisión Nacional de Valores OTC Market Merval Bolsa For public securities Caja de Valores Argenclear Banco de Valores BCRA CRYL System of registry and settlement of public liabilities and trusts Caja de Valores S.A. Founded in November, 1974 Limited Company of national private capital Legal framework Act 20643 Decree 659/74 Decree 2220/80 CNV regulations(Res. Gral. 368-01) 4 Share Capital CVSA BCBA 49,9 % Others MERVAL 49,9 % 5 Functions of Caja de Valores S.A. and its shareholders 9 Concertation, 9 Regulates, authorizes, suspends and cancels quotation 9 Registers and Publishes the daily operations and their prices settlement, Bolsa de Comercio de Buenos Aires Mercado de Valores de Buenos Aires SA important information 9 Supervises and takes stockbrokers 9 Regulates and companies. companies and disperses transactions measures against the activity of the listed statements of listed warranty of the disciplinary 9 Inspects and regulates 9 Publishes financial supervision and coordinates the CAJA DE VALORES proceess of the securities Central Securities Depository 6 Participants Brokers (local and international) Securities markets and Stock Exchanges Banks and Financial Companies Secretary of Treasury Pension Funds Insurance Companies Depositories of Mutual and Investment Funds Central depositories Overseas investment funds 7 Custody Components The Collective Deposit Participants accounts Beneficial owner accounts 611 2,565.000 Nominal value of custody (F/V) 319,000,000,000 Eligible Securities for Custody Public securities Private securities (Public Offer authorized by the Comisión Nacional de Valores) In both cases: Fisical Securites Book Entry Bonds Global Certificates CEDEAR´s ADR´s 9 Administration of Custody Political rights Shareholders Meetings Certificates Economic rights Collection of dividends, coupons, suscriptions, redemptions, etc. Collaterals Performance of encumbrances or guarantees Caja takes notice of all legal acts related to deposit securities Structure of subaccounts 11 Operation of the Subaccounts Segregation of capital Sending of quarterly Statements by mail - Report containing the balance of the beneficial owner’s account and the movements done in the last three-month period. Returning of Quarterly Statement - 1st. Marking of subaccount - 2nd. Blocking of subaccount Subaccount Bloqueo Marcado Other Blockings – By judicial order: lien of some/all the securities (Securities in Guarantee) – Economic rights on actions: Pledge – Special blockings 12 CVSA’s relationship with the final investor Investor relationship / CVSA – beneficial owner: By means of the depositor • • • • Deposit - Debit –Transfer Shareholders Meetings Certificates Credits Information on corporate events Directly receives the quarterly Statement Magnetic card of query balance • To the beneficial owner´s request 13 Services to Final Holders Registrar of “Bonos Previsionales” The development and functionality of the Securities registrar allows additional services to the traditional custody service Beneficiaries registry of bonds Cancellation of Retired Person´s Debt Quantity of credited beneficiaries 33,000* Nominal amount of bonds 138,000,000* * Information as of October ‘06 Final investors Performance of rights Depositor Depositor Subaccount Subaccount Depositor Subaccount Certificates in the name of Beneficial Owner - Legal certainty Holding Meeting Holding with blocking Law 20.643, CNV Regulations Accredit ownership of the represented securities Decree 677/2001 Entitlement of execution, presentation to bankrupt processes, etc. 15 Participant´s Insolvency Depositor Segregation of capital bankrupt Beneficial owner´s subaccounts: identified final investor 16 Thank You! Norberto Gysin ngysin@cajval.sba.com.ar 17