Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 4

Each market must have clear rules assuring investor protection by safeguarding participants from the financial risks of failed settlement and ensuring that listed companies are required to follow sound policies on corporate governance, transfer of economic benefits and shareholder rights.

1.	Does the depository or the market have securities lending and borrowing schemes in place, and are these open to all market participants and their settlement agents?	The market does not have securities lending and borrowing schemes in place. Securities lending of equities was introduced to the Chilean market in 1999. Currently only broker-dealers are allowed to offer this service. Nobody is executing lending transactions in the market due to the high rate of tax associated with these transactions. Securities lending is subject to capital gains tax: 15% for presence securities*: 35% non-presence**. At any rate, investors in the market can borrow securities through repurchase agreements schemes, subject to their credit capacity in the banking system. *Presence securities: issues with daily trading activity **Non-presence securities: less frequently taded issues
2.	Does the settlement system mark fail trades to market and collect margin from the failing counterparty to protect the innocent counterpart's interest?	No, it does not. According to Chilean regulations, local brokers are held responsible for all transactions for which they execute a contract. Partial settlements are not market practice and fails are very rare.
3.	Does the market operate a guarantee fund or have an equivalent procedure to protect against the cost of failed transactions; and which sectors of the market does it cover?	No, the market does not operate a guarantee fund.
4.	Are the stock transfer agents (share registrars) linked electronically to the depository?	Most of the stock transfer agents are connected electronically with DCV. Furthermore, DCV runs a lot of share registers directly.
5.	Is there a legal maximum time period to complete ownership transfers in the books of the issuer? If so, does market practice adhere to the deadline?	The legal maximum time period to complete ownership transfers in the books of the issuer is 24 hours after the issuer receive the information related to the transaction. It is normal that the market adheres to this deadline.
6.	Are investors entitled to all benefits arising on a security from the point of purchase; and how are any rules enforced?	Investors are entitled to all benefits arising on a security since they buy the security.
7.	Is proxy voting permissible in the market and can such proxies be lodged by post or other remote delivery method?	Proxy voting is permissible in the market and physical attendance is required to vote by proxy. In some specific cases, only local brokers and custodians are eligible to split vote on behalf of their clients.
8.	Are there binding rules in the market stating the minimum and maximum lapsed time between the announcement and completion of key events, including registration, the calling of shareholder meetings, the payment of dividends or interest, rights issues, tender offers and other voluntary corporate actions?	Minimum and maximum lapsed time between the announcement and completion of key events, like registration, the calling of shareholder meetings, the payment of dividends or interest, rights issues, tender offers and other voluntary corporate actions, are completely well defined in the law and related regulations. Under Chilean regulations, companies must announce meetings at least 15 days in advance, although market practice is that this information is provided at least one month prior. Meeting notices are usually published in stock exchange bulletins and daily newspapers. The agendas for the Annual General Meetings are dictated by law and must cover certain criteria. As proxy cards are not allowed, physical attendance is required. The ability to vote is determined by settled, registered position as of record date. Shares are not blocked at general meetings (annual or extraordinary).
9.	Are all voluntary corporate actions advised through a central mechanism assuring consistent information to all investors?	All voluntary corporate actions are advised to the regulator, the exchanges and the shareholders, and also published in newspapers.
10.	Is information on corporate actions available electronically, and is the minimum lapsed time for responding to such actions sufficient to enable all domestic and foreign investors to respond in a timely and considered fashion?	The information on corporate actions is available electronically, through the exchanges web sites. The minimum lapsed time for responding such actions is enough to enable domestic and foreign investors to answer in a timely and considered fashion. Corporate actions are also informed to market participants electronically through DCV's system. Once published, corporate action notices can be changed without incurring any penalties for changes. All changes must be communicated.