MONTEVIDEO

Benefits of the Montevideo Stock Exchange

Clearing, Settlement & Custody System

October 2005Patricia Torrado

Uruguayan Security Market

• Market Regulator and Controller: Banco Central del Uruguay • 2 Stock Exchange Entities Montevideo Stock Exchange: 138 years 76 members (artificial persons and Stock Firms) 10 Special Members (6 Banks, National Insurance Bank “Banco de Seguros del Estado” and 3 semi-private banks) Electronic Stock Exchange: 12 years 24 Operators: 19 Banks and Foreign Currency Brokers 4 PFTs and 1 Semi-private Bank)

Uruguayan Security Market

• Public Bond Market:

• Private Bond and Share Market: almost non-existent

LOCAL PUBLIC DEBT BY 30/09/05

23%

77%Dematerialized

Physical

LOCAL vs INTERNATIONAL PUBLIC DEBTBY 30/09/05

40%

60%

International

Local

Uruguayan Security Market

• 2 Clearing, Settlement and Custody Systems: 1) Banco Central del Uruguay: Custody of local dematerialized public debt Settlement of same-day foreign currency exchange operations and local dematerialized securities of the Electronic Stock Exchange Settlement of local dematerialized securities operations between the MSE’s CSCS and the financial institutions that do not participate in it

Uruguayan Security Market

2) Montevideo Stock Exchange: Custody of Uruguayan public and private (physical and dematerialized) securities and foreign securities Clearing and Settlement of operations between MSE members. Settlement of MSE members’ dematerialized local securities and the rest of the financial system through the BCU Settlement of cross border operations

MSE’s CSCS

• Immobilization and DematerializationPhysical and Dematerialized Securities Held in

Safekeeping

0

100

200

300

400

500

600

700

800

Mill

ions

FISICOS DESMATERIALIZADOS

1998 1999 2000 2001 2002 2003 2004 30/09/05

MSE’s CSCS

• Custody Certificate Issued for Investors

Compensation, Settlement andCustody System

System Participants

Investors

MSE’s CSCS

• Settlement of cross border operations

OPERATED VOLUMES BY TYPES OF SECURITIES

0

100

200

300

400

500

1998 1999 2000 2001 2002 2003 2004 30-9-05

Mill

ions

EXTERIOR LOCALES

MSE’s CSCS

• Local and International Uruguayan Debt Swap in 2003• Tool in the bank liquidation processes after the 2002

crisis, as well as debt settlement of the financial system’s debtors

MSE’s CSCS

• Who benefits from MSE’s CSCS?

Investors MSE Operators Montevideo Stock Exchange Banco Central del Uruguay

MSE’s CSCS

• What are the Uruguayan CSCSs lacking? Unification of operations settlement Further reduction of settlement-related risks Legal framework concerning physical securities, etc. etc. .......• Is there a potential way? Cooperation

Thank you