Custody Services

LATIN CLEAR offers its Participants custody services for securities using a method of inmovilization or dematerialization (book entry tranfers), in a safe environment, including vaults and a system permitting efficiency and safety in securities consignment. Around the 99.8% of Balances under custody, as of December 2003 were inmobilized or dematerialized.

The systems designed to receive securities are characterized by the special care taken to establish strict controls to safeguard them.

In the same way, LATIN CLEAR has a vault that meets the standards adopted by the banking industry, fire-proof filing cabinets, an optic disc system to scan the physical securities coming into custody, contingency systems for hardware and software, closed circuit cameras, periodic audits performed by both in-house and outside auditors to minimize the risks in the custody of securities. Additionally, we hold a securities replacement policy and a Fidelity Bond policy with AIG Panama, 100% subsidary of AIG-USA, one of the insurance industry’s most solid companies in the United States, with a AAA rating by Moody’s Standard and Poor.

Global Notes

A Global Note is a unique certificate that represents a whole or partial securities issue.

This instrument, called “Global Note” rests in LATIN CLEAR’s vault, with the advantage of eliminating the removal of certificates and all the risks that go along with it. The investor is then given a certificate of ownership of, or name on, the securities from their Broker, and periodically receives an account statement with details about their securities prepared by their Broker.

For the issuing business, the issue of Global Notes has enormous advantages such as the notable reduction in the costs of issuing, vaults, issue of physical certificates, insurance, and other intangible costs involved in the whole process of issuing securities. At the same time, the risks of robbery, loss or falsification of the securities is minimized since the Global Note is a negotiable instrument, valid only to the issuer under contract for it with LATIN CLEAR.

Clearing and Settlement Services

These services have resulted in a great advantage to the Panamanian Stock Market, since they eliminated the use of checks in the Market system. Now, Latin Clear use an electronic system for clearing and settlement, improving the efficiency and reducing credit risk in the market.

Value Administration Services

Administrative Services for Securities: As a centralized securities depository, LATIN CLEAR counts on a system of custody and administrative services for securities to manage custody services, corporate actions, clearing and settlement for the securities in the local market.

Corporate Actions: LATIN CLEAR offer all the corporate actions services for securities registered in Panama Stock Exchange and Latin Clear. Corporate action handled for Latin Clear are: coupon payment, capital, amortization and dividends, swaps, proxy voting, through an electronic system.

International Custody Services

LATIN CLEAR has extended its services through the opening of reciprocal accounts with other Central Securities Depositories in the Central American region.

Latin Clear also has an account in Clearstream in Luxembourg (formerly Cedel Bank).

In this manner, LATIN CLEAR has obtained availability of custodial services in countries such as Costa Rica ,El Salvador and Clearstream in Luxembourg.

This electronic link of the CSD’s sets an important milestone in the integration of the markets in the region, where each central has reciprocal custody accounts and it is established as an electronic link to expand the range of international custody services for both countries. At the same time, this integration of the CSD’s is an effective mechanism that facilitates the enlargement of the supply and demand of securities that could potentially be negotiated in the regional market.