BM&FBOVESPA EQUITIES CLEARINGHOUSE (BOVESPA SEGMENT) AND CENTRAL SECURITIES DEPOSITORY (EQUITIES CLEARINGHOUSE) RULEBOOK

Transcription

1 This is a free translation offered only as a convenience for English language readers and is not legally binding. Any questions arising from the text should be clarified by consulting the original in Portuguese. BM&FBOVESPA EQUITIES CLEARINGHOUSE (BOVESPA SEGMENT) AND CENTRAL SECURITIES DEPOSITORY (EQUITIES CLEARINGHOUSE) RULEBOOK December 2015

2 TABLE OF CONTENTS TITLE I - PURPOSE... 8 TITLE II - DEFINITIONS... 9 TITLE III PARTICIPANT ACCESS CHAPTER I CLEARINGHOUSE PARTICIPANTS CHAPTER II CLEARING AGENTS Section I Classification Section II Eligibility Section III Admission Section IV Capital Requirements Section V Technical and Operational Requirements Section VI Contributions to the Settlement Fund Section VII Contractual Relationships Section VIII Withdrawal of Accreditation CHAPTER III CUSTODIAN AGENTS Section I Classification Section II Eligibility Section III Admission Section IV Capital Requirements and Custody Limits Section V Technical and Operational Requirements Section VI Contractual Relationships

3 Section VII Withdrawal of Accreditation CHAPTER IV GROSS SETTLEMENT AGENTS Section I Eligibility Section II Admission Section III Capital Requirements Section IV Technical and Operational Requirements Section V Contractual Relationships Section VI CHAPTER V QUALIFIED INVESTORS Section I Eligibility Section II Withdrawal of Accreditation CHAPTER VI REGISTRATION PARTICIPANTS Section I Eligibility Section II Admission Section III Capital Requirements Section IV Technical and Operational Requirements Section V Contractual Relationships Section VI TITLE IV NATURE OF ACTIVITIES AND OPERATING DISCIPLINE.. 34 CHAPTER I LEGAL NATURE CHAPTER II TRANSACTION REGISTRATION AND ACCEPTANCE CHAPTER III

4 CLEARING AND SETTLEMENT Section I Multilateral Netting Section II Settlement CHAPTER IV RISK MANAGEMENT Section I Nature; Scope Section II Credit Risk on Settlement Section III Liquidity Risk on Settlement Section IV Settlement Fund Section V CHAPTER V GROSS SETTLEMENT AND BILATERAL SETTLEMENT SERVICES Subsection I Structure of Settlement Accounts Subsection II Bilateral Netting Subsection III Failure to pay a bilateral net balance CHAPTER VI SECURITIES DEPOSITORY SERVICE Section I Structure of Custody Accounts Section II Deposit, Withdrawal and Transfer of Securities Section III Custody Limits and Limit Monitoring Section IV Treatment of Corporate Actions CHAPTER VII FEES CHAPTER VIII INTERNAL CONTROLS TITLE V - RIGHTS AND RESPONSIBILITIES OF THE CLEARINGHOUSE AND CLEARINGHOUSE PARTICIPANTS

5 CHAPTER I RIGHTS AND RESPONSIBILITIES OF THE CLEARINGHOUSE Section I Responsibilities of the Clearinghouse Section II Rights of the Clearinghouse CHAPTER II RIGHTS AND RESPONSIBILITIES OF CLEARING AGENTS Section I Responsibilities of Clearing Agents Section II Rights of Clearing Agents CHAPTER III RIGHTS AND RESPONSIBILITIES OF CUSTODIAN AGENTS Section I Responsibilities of Custodian Agents Section II Rights of Custodian Agents CHAPTER IV RIGHTS AND RESPONSIBILITIES OF GROSS SETTLEMENT AGENTS Section I Responsibilities of Gross Settlement Agents Section II Rights of Gross Settlement Agents CHAPTER V RIGHTS AND RESPONSIBILITIES OF REGISTRATION PARTICIPANTS Section I Responsibilities of Registration Participants Section II Rights of Registration Participants CHAPTER VI RIGHTS AND RESPONSIBILITIES OF QUALIFIED INVESTORS Section I Responsibilities of Qualified Investors Section II Rights of Qualified Investors CHAPTER VII RIGHTS AND RESPONSIBILITIES OF FULL TRADING PARTICIPANTS Section I Responsibilities of Full Trading Participants

6 Section II Rights of Full Trading Participants CHAPTER VIII RIGHTS AND RESPONSIBILITIES OF INVESTORS Section I Responsibilities of Investors Section II Rights of Investors CHAPTER IX SETTLEMENT AGENTS CHAPTER X GOLD DEPOSITARIES Section I Responsibilities of Gold Depositaries Section II Rights of Gold Depositaries CHAPTER XI GOLD REFINERS Section I Responsibilities of Gold Refiners Section II Rights of Gold Refiners TITLE VI - CHAIN OF RESPONSIBILITIES CHAPTER I RESPONSIBILITIES RELATED TO SETTLEMENT CHAPTER II RESPONSIBILITIES RELATED TO THE DEPOSITORY SERVICE CHAPTER III BM&FBOVESPA EXEMPTIONS AND LIMITATIONS OF LIABILITY TITLE VII STATE OF ARREARS AND DEFAULT CHAPTER I TYPIFICATION CHAPTER II EFFECTS OF DEFAULT CHAPTER III DEFAULT REPORTING PROCEDURES CHAPTER IV COLLATERAL TREATMENT AND EXECUTION TITLE VIII SETTLEMENT FUND

7 CHAPTER I LEGAL SYSTEM; MANAGEMENT; OWNERSHIP CHAPTER II PURPOSE CHAPTER III FUND SIZE AND COMPOSITION CHAPTER IV FUND UTILIZATION CHAPTER V REVIEW OF CONTRIBUTIONS; REPLENISHMENT MECHANISM TITLE IX SANCTIONS TITLE X - TECHNOLOGY INFRASTRUCTURE AND CONTINGENCY PROCEDURES TITLE XI EMERGENCY ACTIONS TITLE XII - ARBITRATION TITLE XIII FINAL PROVISIONS CHAPTER I OPERATING AGREEMENTS CHAPTER II SPECIAL PROVISIONS CHAPTER III SUPPLEMENTARY RULES

8 T I T L E I - P U R P O S E 1 The purpose of this Rulebook is to govern the activities performed by BM&FBOVESPA in the capacity of deferred net settlement system, central securities depository and related services provider, setting forth the general standards and rules, under applicable regulations, binding on the entities and persons with whom it maintains any kind of legal relationship, either of a contractual nature or of an operational one. 2 Details regarding the activities governed by this Rulebook are defined in a set of rules called Operating Procedures, which integrate and complement this Rulebook, in addition to the official letters and circular letters issued from time to time by BM&FBOVESPA. 8

9 T I T L E II - D E F I N I T I O N S 3 As used herein, in either plural or singular form, the following terms will have the meanings set forth herein below, whereas giving regard to the context provided by the headings thereto: 3.1 Acceptance [aceitação] means the procedure by which the Clearinghouse undertakes to act as Counterparty for the Settlement of registered Transactions; 3.2 Clearing Agent [agente de compensação] means an institution that, acting as Counterparty to its clients and the Clearinghouse, undertakes responsibility for settling Transactions and providing collateral for proprietary and/or customer Transactions, and which may qualify as Full Clearing Agent or Proprietary Clearing Agent or Special Clearing Agent; 3.3 Custodian Agent [agente de custódia] means an institution that, towards its customers and the Clearinghouse, undertakes responsibility for managing proprietary and customer Custody Accounts within the Depository Services, and which may qualify as Full Custodian Agent or Proprietary Custodian Agent or Special Custodian Agent; 3.4 Gross Settlement Agent [agente de liquidação bruta] means an institution that, towards its customers and the Clearinghouse, undertakes responsibility for the Gross Settlement of proprietary and customer Transactions; 3.5 Trading Environment [ambiente de negociação] means the organized exchange-traded and over-the-counter markets and the unorganized over-the-counter markets on which Transactions are carried out; 3.6 Securities [ativos] mean the securities, rights, contracts and other financial instruments issued by a government or a corporate Issuer; 3.7 Block for Sale [bloqueio de venda] means the mechanism by which a Full Trading Participant indicates that the Securities underlying a given sale Transaction executed for an Investor have been committed to ensure the Securities delivery obligation in the Settlement process; 3.8 BM&FBOVESPA [BM&FBOVESPA S.A. - BOLSA DE VALORES, MERCADORIAS E FUTUROS (BM&FBOVESPA)] means the BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros or BM&FBOVESPA SA - Securities, Commodities and Futures Exchange, which manages organized securities markets and whose primary function is to maintain systems suitable for the execution of purchase and sale transactions, auctions and special transactions involving Securities, in addition to managing clearing, settlement and custody systems; 3.9 BSM [BM&FBOVESPA Supervisão de Mercados (BSM)] means BM&FBOVESPA Supervisão de Mercados, or BM&FBOVESPA Market Supervision, a mutualized notfor-profit entity responsible for the review, monitoring and oversight of the activities of 9

10 BM&FBOVESPA, Clearing Agents, Gross Settlement Agents and Custodian Agents, among others; 3.10 Clearinghouse [câmara] means the BM&FBOVESPA facility whose primary function is to provide clearing, settlement and risk management services for the Transactions executed on the BOVESPA Segment. It is also responsible for providing custodial and central depository services for the securities traded at BM&FBOVESPA; 3.11 Settlement Cycle [ciclo de liquidação] means the time periods established by the Clearinghouse for the performance of obligations resulting from the Settlement of Transactions; 3.12 Clearing [compensação] means the procedure for calculating the net balances in Securities and financial resources between the Counterparties for the Settlement of mutual debts and credits; 3.13 Custody Account [conta de custódia] means any individual or collective account for Securities and gold as a financial asset deposited at the Clearinghouse Depository or with other depositories; 3.14 Omnibus Account [conta coletiva] means a collective custody account of Securities held by natural and/or legal persons, including funds and other collective investment schemes, resident, domiciled or headquartered abroad; 3.15 Collateral Account [conta de garantia] means an account set up to register the movement of pledged Collateral; 3.16 Passenger Account [conta passageiro] means an individual Securities custody account held by natural and/or legal persons, including funds and other collective investment schemes, resident, domiciled or headquartered abroad; 3.17 Settlement Account [conta de liquidação] means an account held in STR, as regulated by the Central Bank of Brazil, which is utilized by the relevant holder to make or receive Payments associated with proprietary obligations to the Clearinghouse, whenever acting in the capacity of Clearing Agent or Gross Settlement Agent or Registration Participant or Custody Agent, as the case may be; 3.18 Clearinghouse Settlement Account [conta de liquidação da câmara] means an account held in STR, as regulated by the Central Bank of Brazil, which is utilized by the Clearinghouse to make or receive Payments associated with the Settlement process; 3.19 Securities Settlement Account [conta de liquidação de ativos] means the Securities account held by the Clearinghouse in its Depository Service, or even in other central depositories, in order to perform the steps in the Settlement process; 10

11 3.20 Gold Settlement Account [conta de liquidação de ouro] means the account held by the Clearinghouse in its Depository Service, in order to perform the steps in the Settlement process of transactions involving gold as a financial asset; 3.21 Bank Reserves Account [conta reservas bancárias] means an account held in STR, as regulated by the Central Bank of Brazil, which is utilized by the relevant holder to make or receive Payments associated, as the case may be, with (i) proprietary obligations to the Clearinghouse, whenever acting in the capacity of Clearing Agent or Gross Settlement Agent or Registration Participant or Custody Agent; and (ii) third-party obligations to the Clearinghouse; 3.22 Counterparty [contraparte] means the institutions that appear opposite each other in the Settlement of Transactions; 3.23 Central Counterparty [contraparte central], or CCP, means the position assumed by the Clearinghouse exclusively to Clearing Agents in the Settlement of Transactions after the Acceptance thereof; 3.24 Custody Service Agreement [contrato de prestação de serviços de agente de custódia de ativos] means the agreement executed by the Clearinghouse and the Custody Agents entitling the latter to provide depository services for Assets and gold as a financial asset, in accordance with applicable legislation and the Clearinghouse Rulebook and Operating Procedures; 3.25 Global Custodian [custodiante global] means a foreign institution licensed in its home jurisdiction to manage Custody Accounts, whether proprietary or customer accounts; 3.26 Depository [depositária] means the BM&FBOVESPA department responsible for providing custodial and central depository services for Securities; 3.27 Gold Depositary [depositário de ouro] means the entity registered by BM&FBOVESPA to be responsible for receiving, holding in custody and preserving the gold bars held under custody at the Depository Service; 3.28 Deposit [depósito] means placing Securities and gold as a financial asset with the Clearinghouse, with an entry record made in the relevant Investor Custody Account; 3.29 Issuer [emissor] means a company undertaking the obligations inherent in the Securities it issues; 3.30 Delivery [entrega] means the Transfer of Securities to or from a Securities Settlement Account with the Clearinghouse or other depositories, in order to settle obligations arising from Transactions; 3.31 Transaction Allocation [especificação de operações] means the process by which a Full Trading Participant identifies to the Clearinghouse the Investors associated with the Transactions to be settled; 11

12 3.32 Corporate Actions [evento de custódia] mean an Issuer s obligations related to the redemption of principal and interest in connection with the Securities issued by the Issuer and held under the Clearinghouse custody; 3.33 Gold Refiner [fundidor de ouro] means the financial institution registered by BM&FBOVESPA to be responsible for producing, receiving, holding in custody and preserving gold bars under custody in the Depository Service; 3.34 Settlement Fund [fundo de liquidação] means a dedicated fund established in order to cover losses in excess of pledged Collateral, in cases of default by Clearing Agents; 3.35 Collateral [garantias] means Securities, financial resources, rights, contracts and other instruments pledged to fulfill Participant obligations; 3.36 Risk Management [gerenciamento de riscos] means the set of activities aimed to minimize the possibility of discontinuity in the Transaction Settlement process and in the provision of the Depository Service, including through the adoption of generally accepted techniques, models and systems; 3.37 Default [inadimplência] means a failure to perform an obligation in the agreed time, place and manner; 3.38 Investor [investidor] means a natural or legal person, including collective investment schemes, which uses the services of Full Trading Participants to carry out Transactions in Trading Environments or those of Custodian Agents for the custody of Securities and gold as a financial asset; 3.39 Non-Resident Investor [investidor não residente] means a natural or legal person, including funds or collective investment schemes, resident, domiciled or headquartered abroad; 3.40 Qualified Investor [investidor qualificado] means an Investor authorized to settle Transactions directly, through one or more Full Clearing Agents, irrespective of the Full Trading Participant through which said Transactions may have been executed; 3.41 Settlement Window [janela de liquidação] means the interval of time that starts with the closing of the window for receipt of financial resources by the Clearinghouse and ends at the time the Clearinghouse transfers funds in STR for Settlement of its obligations as Central Counterparty; 3.42 Operating Limit [limite operacional] means an operating cap the Clearinghouse assigns to a Clearing Agent, and the latter to its customers, in order to limit the risk associated with the Settlement of Transactions under its responsibility; 3.43 Custody Limit [limite de custódia] means the limit the Clearinghouse assigns to a Custodian Agent for the total value of Securities held in Custody Accounts; 12

13 3.44 Settlement [liquidação] means a process by which rights and obligations, in Securities, gold as a financial asset and financial resources, are terminated; 3.45 Bilateral Settlement [liquidação bilateral] means a process by which the amount resulting from bilateral netting of rights and obligations in financial resources, owed by one counterparty to the other and vice versa, is settled; 3.46 Gross Settlement [liquidação bruta] means a process by which the orders for the Settlement of funds and the transfer of Securities occur on an individual basis, that is, the Transactions are settled one by one; 3.47 Settlement Agent [liquidante] means the institutions registered in the Clearinghouse that utilize their Bank Reserves Accounts or Settlement Accounts, held with the Central Bank of Brazil, to make or receive the Payments associated with the Settlement process; 3.48 Market [mercado] means a set of activities associated with Transactions in Securities of similar characteristics, such as the equities market, the corporate debt market and others; 3.49 State of Arrears [mora] means the failure to perform obligations in the agreed time, place and manner under circumstances, however, that signal the possibility of such obligations being fulfilled through the use of Collateral or other liquidity mechanisms; 3.50 Transactions [operações] mean trades in Securities and Securities-based derivatives, including lending arrangements, which are liable to be accepted by the Clearinghouse in the capacity of Central Counterparty; 3.51 Payment [pagamento] means the transfer of funds through the Clearinghouse Settlement Account in STR, in order to settle obligations associated with the Settlement of Transactions, with required Collateral, with Corporate Actions, with the fees payable to the Clearinghouse, and with the Transactions and the Securities registered in Registration Systems; 3.52 Participant [participante] means a natural or legal person that establishes a direct or indirect relationship with the Clearinghouse while acting (whether on a cumulative basis or not) in the capacity of Clearing Agent, Gross Settlement Agent, Registration Participant, Custodian Agent, Full Trading Participant, Settlement Agent, Investor, or Qualified Investor; 3.53 Full Trading Participant [participante de negociação pleno] means an institution licensed to execute Transactions for a proprietary portfolio or for the account and order of customers in any Trading Environment and in the Securities Lending Service; 3.54 Registration Participant [participante de registro] means an institution that is licensed to register Securities and Transactions for a proprietary portfolio or for the account and order of customers in Registration Systems, and which undertakes responsibility, 13

14 towards the Clearinghouse and its customers, for the Gross Settlement and the Bilateral Settlement of rights and obligations, in financial resources, due after a registration is made, as well as the delivery of securities, where this is foreseen; 3.55 Withdrawal [retirada] means removing Securities and gold as a financial asset from the Clearinghouse Depository, with an exit record being made in the relevant Investor Custody Account; 3.56 BOVESPA Segment [segmento bovespa] means the organized market managed by BM&FBOVESPA for the trading of equities and equity-based derivatives (options, forwards and futures); 3.57 SELIC [SELIC] means the Special System for Settlement and Custody managed by the Central Bank of Brazil; 3.58 Depository Service [serviço de depositária] means the centralized depository and fungible and non-fungible custody services for Securities and gold as a financial asset managed by the Clearinghouse; 3.59 Securities Lending Service [serviço de empréstimo de ativos] means the service managed by the Clearinghouse which allows Investors to lend and borrow Securities; 3.60 Trading System [sistema de negociação] means the technological and operational facilities which allow Transactions to be carried out on Trading Environments; 3.61 Registration System [sistema de registro] means the technological and operational facilities which allow Securities and Transactions to be registered in the registration environments managed by BM&FBOVESPA, pursuant to the specific rules and procedures it issues; 3.62 STR [STR] means the Reserves Transfer System managed by the Central Bank of Brazil; 3.63 Transfer [transferência] means the free of payment movement of Securities and gold as a financial asset between Custody Accounts in the Depository Service; 14

15 T I T L E III P A R T I C I P A N T A C C E S S CHAPTER I CLEARINGHOUSE PARTICIPANTS 4 The Clearinghouse performs activities as a Securities Clearing and Settlement facility and as a Central Securities Depository, in addition to managing a Gross Settlement and Bilateral Settlement System. 5 Acting in the capacity of Central Counterparty, it has the following three (3) categories of Participants: Full Clearing Agent, Proprietary Clearing Agent and Special Clearing Agent. 6 Acting in the capacity of Central Securities Depository, the Clearinghouse has the following three (3) categories of Participants: Full Custodian Agent, Proprietary Custodian Agent and Special Custodian Agent. 7 Acting in the capacity of manager of Gross Settlement and Bilateral Settlement systems, the Clearinghouse has the following two (2) categories of Participants: Gross Settlement Agent and Registration Participant. Gross Settlement Agents operate only in the Gross Settlement process, whereas Registration Participants operate in both Gross Settlement and Bilateral Settlement processes, pursuant to this Rulebook. 8 Institutions that wish to act as Clearing Agents, Custodian Agents, Gross Settlement Agents and Registration Participants are required to submit an application to the Clearinghouse accompanied by the documentation set forth in Appendix I of the Operating Procedures, and be admitted to the Clearinghouse pursuant to the provisions contemplated in the Rules for Access to the BM&FBOVESPA Systems and Markets. Registration Participants are also subject to the specific rules and procedures set forth for Registration System. 9 The BM&FBOVESPA Board of Directors will analyze the documentation attached to the application and assess the adequacy of the candidate to the relevant Participant category, formally communicating its approval or not of the applicant s admission to the Clearinghouse. 9.1 In the event of a decision to reject an application, the relevant candidate may appeal to the Shareholders Meeting of BM&FBOVESPA. The appeal will firstly be reviewed by the Board of Directors that will analyze it and may elect to reconsider its former decision. 9.2 The deadlines and procedures assigned for the decision and the appeal are set forth in the Rules for Access to BM&FBOVESPA Systems and Markets. Registration Participants are also subject to the specific rules and procedures set forth for Registration System. 15

16 CHAPTER II CLEARING AGENTS Section I Classification 10 Clearing Agents are classified pursuant to the following categories: 10.1 Full Clearing Agents: institutions licensed to settle Transactions they execute for proprietary portfolios and also for customers, Full Trading Participants or Qualified Investors portfolios; 10.2 Proprietary Clearing Agents: institutions licensed to settle Transactions: which they execute for proprietary portfolios or for customer portfolios; which are intermediated by companies belonging to the same economic group as the Proprietary Clearing Agents; which are intermediated by another institution for companies belonging to the same economic group as the Proprietary Clearing Agents; and which are executed for collective investment schemes managed by them or by companies belonging to the same economic group as the Proprietary Clearing Agents, even if such Transactions are intermediated by another institution Special Clearing Agents: institutions licensed only to settle Transactions in corporate debt securities issued by non-financial companies whose Securities are listed on Trading Environments: which they execute for proprietary portfolios or for customer portfolios; which are intermediated by companies belonging to the same economic group as the Special Clearing Agents; which are intermediated by another institution for companies belonging to the same economic group as the Special Clearing Agents; and which are executed for collective investment schemes managed by them or by companies belonging to the same economic group as the Special Clearing Agents, even if such Transactions are intermediated by another institution. 16

17 Section II Eligibility 11 Brokerage houses, broker-dealers, multi-service banks, commercial banks, investment banks, and other institutions, in the discretion of the Clearinghouse, are eligible to qualify as Clearing Agents. Section III Admission 12 The approval of a Clearing Agent s admission to the Clearinghouse and the performance of its activities is contingent on the essential requirements set forth below: 12.1 adhering formally to this Rulebook and the Clearinghouse Operating Procedures and other applicable regulatory and operating rules adopted by the Clearinghouse, by entering into a Clearing Service Agreement; 12.2 contributing to the Clearinghouse Settlement Fund, by making the minimum fixed contribution and the variable contribution established by the BM&FBOVESPA Management; 12.3 having a recognized expertise in credit assessment and lending, and in risk management activities in general; 12.4 having recognized organizational and operating capabilities, regarding in particular the Settlement of Transactions; 12.5 presenting a financial and economic standing consistent with the nature of the activities of a Clearing Agent, concerning in particular the maintenance of adequate capitalization, liquidity and indebtedness levels, pursuant to the provisions of the Operating Procedures; 12.6 presenting an adequate profitability level, consistent with its levels of business and capitalization; 12.7 having been licensed as a Clearinghouse Custodian Agent; 12.8 having as directors, officers and representatives persons of good professional, ethical and credit repute; 12.9 meeting the requirements set out in the basic audit guide of the BM&FBOVESPA operational qualification program (PQO); and adhering formally to BSM s rules and regulations and to the Market Arbitration Chamber, by entering into the Clearing Service Agreement. 17

18 Section IV Capital Requirements 13. For the performance of their activities, Clearing Agents must meet minimum capital and liquidity requirements, requirements of property and equipment, in addition to other requirements related to their financial and economic standing, as established by the Clearinghouse. 14. Minimum capital requirements differ by category of Clearing Agent and are described in Appendix 1 of the Operating Procedures. 15. The minimum capital requirements may change at any time, in the discretion of the Clearinghouse. 16. On evaluating an application for admission, and periodically thereafter, the Clearinghouse verifies compliance with capital requirements, in order to ensure that Clearing Agents meet them on a continuing basis. Section V Technical and Operational Requirements 17. Clearing Agents must meet the following operational requirements, irrespective of the category to which they belong: 17.1 having been granted access to the Clearinghouse systems and the functionalities required by the activities of a Clearing Agent; 17.2 engaging a Settlement Agent licensed by the Central Bank of Brazil and duly registered at the Clearinghouse on the basis of the documentation listed in Appendix 1 of the Operating Procedures; 17.3 designating the officer responsible for risk management activities; 17.4 providing a document describing the main features of the operating and technology systems employed in the provision of services, including a summary specification of the systems intrinsic and extrinsic operating routines and related internal procedures and controls; and 17.5 providing an organizational chart that indicates the department responsible for performing the services to be provided and explains the Chinese wall scheme to segregate risk management activities from other third-party asset management activities (for Full Trading Participants and Qualified Investors). 18. Clearing Agents must meet minimum standards related to technology infrastructure and contingency procedures appropriate for the performance of their activities, as set forth under Title X ( Technology Infrastructure and Contingency Procedures ) of this Rulebook and in specific additional rules issued by the Clearinghouse. 18

19 Section VI Contributions to the Settlement Fund 19. Contributing to the Settlement Fund of the Clearinghouse constitutes an essential requirement for the performance of activities as a Clearing Agent. 20. The Settlement Fund is composed of minimum fixed contributions established by category of Clearing Agent, of variable contributions corresponding to the share of each Clearing Agent in the Clearinghouse s total risk exposure, as measured through stress testing, and also of a BM&FBOVESPA contribution Each of the minimum fixed contributions and the variable contributions may be made in cash or in Brazilian government securities Variable contributions may be required on a daily basis. Section VII Contractual Relationships 21. Clearing Agents are required to enter into proper instruments in order to: 21.1 vis-à-vis BM&FBOVESPA, adhere formally to this Rulebook, declaring: that they have knowledge of the rules governing the activities of a Clearing Agent; that they recognize their responsibility towards BM&FBOVESPA in case the Settlement Agent they engage fails to meet the obligation to transfer funds for the Settlement of Transactions; that they exempt BM&FBOVESPA from liability in case the Settlement Agent they engage fails to meet the obligation to transfer funds received from BM&FBOVESPA and associated with the Settlement of Transactions; 21.2 Vis-à-vis its customers, Clearing Agents must implement the relevant service agreements, which at a minimum should contain provisions addressing the following: customers are to take full responsibility for the decision to engage a Clearing Agent and for the actions of the Clearing Agent they engage in the course of rendering services; customers are to exempt BM&FBOVESPA from liability in case the Clearing Agent fails to meet its obligations towards the customer, regardless of the circumstances leading to failure; customers are to acknowledge awareness of, and expressly adhere to the terms and conditions of this Rulebook; 19

20 Clearing Agents are to commit to giving customers prior notice of intent to discontinue their activities as a Clearing Agent or to terminate the service provision, pursuant to the Operating Procedures; customers are to acknowledge that sanctions and penalties that BM&FBOVESPA may impose on a Clearing Agent due to illegal or irregular actions of a customer may also extend to, and be imposed on such customer; the institution responsible for the records related to a Qualified Investor assumes liability for the accuracy and truthfulness of said information; and statement of the commencement date of the services Vis-à-vis Settlement Agents, Clearing Agents must implement the relevant service agreements, in particular as related to the transfer of financial resources in the name and for the account of Clearing Agents. 22. For due legal purposes, the contractual relationship set forth in paragraph 21.2 will be deemed to have been made and assumed, even in the absence of a proper instrument, starting from any first direct or intermediated Delivery of Securities or transfer of funds for Settlement, or Collateral posting with Clearing Agents. Section VIII Withdrawal of Accreditation 23. Clearing Agents may, at any time, elect to terminate the provision of Settlement services, provided they give the Management of BM&FBOVESPA at least three (3) business days prior written notice of the decision, in addition to giving prior notice to customers, in accordance with the provisions of the Operating Procedures. 24 Clearing Agents will remain responsible for any Transactions pending Settlement and any other obligations assumed by their customers or related to proprietary portfolios, until they are completely extinguished. 25. Pursuant to the provisions under Title IX ( Sanctions ) and Title XI ( Emergency Actions ) of this Rulebook, the Clearinghouse may withdraw the authorization granted to any Clearing Agents. CHAPTER III CUSTODIAN AGENTS Section I Classification 26. Custodian Agents are classified pursuant to the following categories: 20

21 26.1 Full Custodian Agents: institutions licensed to manage proprietary Custody Accounts and those of companies belonging to the same economic group as the Full Custodian Agents, in addition to Custody Accounts of non-institutional investors, investment clubs, institutional investors and Non-Resident Investors Proprietary Custodian Agents: institutions licensed to manage proprietary Custody Accounts and those of companies belonging to the same economic group as the Proprietary Custodian Agents, in addition to Custody Accounts of institutional and noninstitutional investors, and investment clubs, subject to terms and limits established by the Clearinghouse Special Custodian Agents: these are institutions licensed only to manage proprietary Custody Accounts. Section II Eligibility 27. Brokerage houses, broker-dealers, multi-service banks, commercial banks, investment banks, commodity brokerage firms (exclusively to provide custody services for gold as a financial asset) and other institutions, in the discretion of the Clearinghouse, are eligible to qualify as Custodian Agents. 28. Closed-end pension funds licensed by the Brazilian Supplementary Pension Plan Secretariat [Secretaria da Previdência Complementar], or SPC, as well as insurance companies and open-end pension funds licensed by the Brazilian Private Insurance Superintendency [Superintendência de Seguros Privados], or SUSEP, and other institutions, in the discretion of the Clearinghouse, are eligible to qualify as Special Custodian Agents. Section III Admission 29. The approval of a Custodian Agent s admission to the Clearinghouse and the performance of its activities is contingent on the essential requirements set forth below: 29.1 adhering formally to this Rulebook and the Clearinghouse Operating Procedures and other applicable regulatory and operating rules adopted by the Clearinghouse, by entering into a Custody Service Agreement; 29.2 having recognized organizational and operating capabilities, in particular as related to the custody of Securities and gold as a financial asset, when applicable; 29.3 presenting financial and economic standing, in addition to technology and operational infrastructures consistent with the nature of the activities of a Custodian Agent; 29.4 having as directors, officers and representatives persons of good professional, ethical and credit repute; 21

22 29.5 meeting the requirements set out in the basic audit guide of the BM&FBOVESPA operational qualification program (PQO); and 29.6 adhering formally to BSM s rules and regulations and to the Market Arbitration Chamber, by entering into the Custody Service Agreement. Section IV Capital Requirements and Custody Limits 30. For the performance of their activities, Custodian Agents must meet minimum capital requirements and other requirements associated with their financial and economic standing, in addition to Custody Limits, as established by the Clearinghouse. 31. Minimum capital requirements and Custody Limits differ by category of Custodian Agent. 32. The minimum capital requirements and Custody Limits may change at any time, in the discretion of the Clearinghouse. 33. On evaluating an application for admission and periodically thereafter the Clearinghouse will verify compliance with minimum capital requirements, in order to ensure that the Custodian Agents meet them on a continuing basis. Section V Technical and Operational Requirements 34. Custodian Agents must meet the following operational requirements, irrespective of the category to which they belong: 34.1 having been granted access to the Clearinghouse systems and the functionalities required by the activities of a Custodian Agent; 34.2 carrying out the daily reconciliation of Custody Account balances for which they are responsible towards the Clearinghouse; 34.3 allocating to perform custodial activities a minimum of two (2) employees that successfully completed the Clearinghouse qualification and certification program; 34.4 by Custodian Agents that do not hold a Bank Reserves Account or a Settlement Account, engaging a Settlement Agent licensed by the Central Bank of Brazil and duly registered at the Clearinghouse on the basis of the documentation listed in Appendix 1 of the Operating Procedures, which will be responsible for receiving and transferring funds relating to the activities of the Custodian Agents The Custodian Agent that holds a Settlement Account can only use it to make or receive payments associated with its own activities. 22

23 34.5 Providing customers with statements of their Custody Accounts; 34.6 Establishing a proprietary or outsourced custody control system; 34.7 Designating the officer responsible for custodial activities; and 34.8 Providing a document describing the main features of the operating and technology systems employed in the provision of services, including a summary specification of the systems intrinsic and extrinsic operating routines and related internal procedures and controls. 35. Further to the provisions of paragraph 34 above, Full Custodian Agents will be required to meet the additional requirements set forth below: 35.1 providing an organizational chart that indicates the department responsible for performing services to be provided and explains the Chinese wall scheme to segregate third-party custodial activities from asset management activities; and 35.2 providing detailed audit reports concerning the custodial operations, issued by an independent auditing firm engaged to assess the accuracy of information provided in the course of custodial activities, and the effectiveness, quality and security of the Custodian Agent s system operating routines. 36. Custodian Agents (including Special Custodian Agents) must meet minimum standards related to technology infrastructure and contingency procedures appropriate for the performance of their activities, as set forth under Title X ( Technology Infrastructure and Contingency Procedures ) of this Rulebook and in special additional rules issued by the Clearinghouse. Section VI Contractual Relationships 37. Custodian Agents are required to enter into proper instruments in order to: 37.1 vis-à-vis BM&FBOVESPA, execute the required Custody Service Agreement; 37.2 vis-à-vis customers, execute Custody Service Agreements, which at a minimum should contain provisions addressing the following: customers are to take full responsibility for the decision to engage a Custodian Agent; customers are to exempt BM&FBOVESPA from liability in case the Custodian Agent fails to meet its obligations towards the customer, regardless of the circumstances leading to failure; customers are to acknowledge awareness of: 23

24 this Rulebook, and fully adhere to the same; and the Custody Service Agreement executed by BM&FBOVESPA and Custodian Agents Custodian Agents are to commit to giving customers prior notice of intent to discontinue their activities as a Custodian Agent or to terminate the service provision, pursuant to the Operating Procedures; customers are to acknowledge that sanctions and penalties BM&FBOVESPA may impose on a Custodian Agent due to illegal or irregular actions of a customer may also extend to, and be imposed on such customer; statement of the commencement date of the custodial services; and customers are to consent to the Custodian Agent implementing a Block for Sale, if so required Pursuant to applicable legislation, where a Custodian Agent is to make use of simplified record information for a Non-Resident Investor, said Custodian Agent and the related Global Custodian (or Omnibus Account holder) will be required to enter into a written custody agreement with provisions at a minimum addressing the following: a provision to the effect that the agreement and the Global Custodian (or Omnibus Account holder) are subject to the governing law of the Federative Republic of Brazil, its agencies and entities; a provision to the effect that the Global Custodian (or Omnibus Account holder) undertakes to give prior knowledge to its customers about the requirements of Brazilian capital markets legislation by furnishing a copy of the same or designating the place at which such information can be accessed; a provision to the effect that the local operations of the Global Custodian (or Omnibus Account holder) are subject to the Brazilian capital market legislation; a provision to the effect that the Custodian Agent undertakes to provide the Global Custodian (or Omnibus Account holder) with copies of the Brazilian laws, statutes, codes, regulations, rules and requirements applicable to the domestic capital market, as enacted and issued by the Brazilian government authorities, regulatory agencies and self-regulatory entities; a provision to the effect that the Global Custodian (or Omnibus Account holder) undertakes to settle disputes related to the agreement established with the Custodian Agent, before the Brazilian courts or the Market Arbitration Chamber; a provision to the effect that the Global Custodian (or Omnibus Account holder) grants powers to a delegate in Brazil for said delegate to act in the name and on behalf of the 24

25 grantor for the purpose of receiving service of process and judicial and/or extrajudicial notifications issued by any Brazilian court, administrative authority and local selfregulatory agencies in connection with the operations contemplated in the relevant agreement; a provision to the effect that the Global Custodian (or Omnibus Account holder) undertakes liability for keeping current information and documentation for proper identification of Non-Resident Investors, doing so for as long as required by Brazilian law, and to make said information available promptly, upon request of the Custodian Agent, as may be necessary for institutional purposes and requirements of regulatory agencies and self-regulatory entities, giving due regard to the deadlines assigned by the relevant agency or entity, each acting within its own sphere of authority; a provision to the effect that the Global Custodian (or Omnibus Account holder) undertakes liability for properly identifying customers, and for diligently fulfilling know your customer (KYC) requirements and applying better recommended antimoney laundering standards and processes; a provision requiring the agreement to be terminated in the event of noncompliance with contractual obligations and, in particular violation of the rules governing the operations and investments of Non-Resident Investors in the Brazilian financial and capital markets; a provision to the effect that the Global Custodian (or Omnibus Account holder) undertakes to designate an employee or department responsible for keeping current record information on Non-Resident Investors and for promptly communicating any changes thereto. 38 Pursuant to applicable legislation, in the event of noncompliance with any provision under paragraph 37.3 and subparagraphs above, the Custodian Agent will be required to make prompt use of the complete record information for the relevant Non-Resident Investors Upon receiving notice from regulatory agencies that any particular Global Custodian (or Omnibus Account holder) has failed to provide information required to be provided, BM&FBOVESPA will promptly give notice thereof to every Custodian Agent having a contractual relationship with such Global Custodian (or Omnibus Account holder) Upon receiving the notice foreseen in the preceding paragraph, Custodian Agents will promptly adopt the complete record information form for the relevant Non-Resident Investors to carry out transactions on the Brazilian financial and capital markets. 39 In the situations contemplated in the Operating Procedures, the Custodian Agents may engage a Full Clearing Agent and agree a joint liability arrangement for Deposits of certain Securities with the Depository Service. 25

26 Section VII Withdrawal of Accreditation 40. Custodian Agents may, at any time, elect to terminate the Custody Service Agreement, provided they give the Management of BM&FBOVESPA at least fifteen (15) business days prior written notice of the decision, in addition to giving prior notice to customers, in accordance with the provisions of the Operating Procedures. 41 Pursuant to the provisions under Title IX ( Sanctions ) and Title XI ( Emergency Actions ) of this Rulebook, the Clearinghouse may withdraw the authorization granted to any Custodian Agents. CHAPTER IV GROSS SETTLEMENT AGENTS Section I Eligibility 42 Brokerage houses, broker-dealers, multi-service banks, commercial banks, investment banks, and other institutions, in the discretion of the Clearinghouse, are eligible to qualify as Gross Settlement Agents. Section II Admission 43 Set forth below are the essential requirements applicable to Gross Settlement Agents: 43.1 adhering formally to this Rulebook and the Clearinghouse Operating Procedures and other applicable regulatory and operating rules adopted by the Clearinghouse, by entering into a Gross Settlement Service Agreement; 43.2 having recognized organizational and operating capabilities, in particular as related to the Settlement of Transactions; 43.3 presenting a financial and economic standing consistent with the nature of the activities of Gross Settlement Agents, in particular the maintenance of adequate capitalization, liquidity and indebtedness levels; 43.4 presenting an adequate profitability level, consistent with the levels of business and capitalization; 43.5 having been licensed as a Clearinghouse Custodian Agent; 43.6 having as directors, officers and representatives persons of good professional, ethical, and credit repute; 26

27 43.7 meeting the requirements set out in the basic audit guide of the BM&FBOVESPA operational qualification program (PQO); and 43.8 adhering formally to BSM s rules and regulations and to the Market Arbitration Chamber, by entering into the Gross Settlement Service Agreement. Section III Capital Requirements 44 For the performance of their activities, Gross Settlement Agents must meet minimum capital, liquidity and investment requirements, in addition to other requirements related to their financial and economic standing, as established by the Clearinghouse, according to the market in which they operate. Section IV Technical and Operational Requirements 45 Gross Settlement Agents must meet the operational requirements set forth below: 45.1 having been granted access to the systems and functionalities required by the activities of a Gross Settlement Agent; 45.2 engaging a Settlement Agent licensed by the Central Bank of Brazil and duly registered at the Clearinghouse on the basis of the documentation listed in Appendix 1 of the Operating Procedures; 45.3 allocating to perform settlement activities a minimum of two (2) employees that successfully completed the Clearinghouse qualification and certification program; 45.4 designating the officer responsible for Settlement activities; 45.5 providing a document describing the main features of the operating and technology systems employed in the provision of services, including a specification of the systems intrinsic and extrinsic operating routines and related internal procedures and controls. 46 Gross Settlement Agents must meet minimum adequacy standards related to technology infrastructure and contingency procedures appropriate for the performance of their activities, as set forth under Title X ( Technology Infrastructure and Contingency Procedures ) of this Rulebook and in special additional rules issued by BM&FBOVESPA. Section V Contractual Relationships 47 Gross Settlement Agents are required to enter into proper instruments in order to: 47.1 vis-à-vis BM&FBOVESPA, adhere formally to this Rulebook, declaring: 27