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?	No, securities lending is currently not possible due to legal restrictions.
2.	Does the settlement system mark fail trades to market and collect margin from the failing counterparty to protect the innocent counterpart's interest?	Failed trades are not marked to market in Colombia. Counterparts must arrange for financial compensation directly with each other.
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?	According to articles 3.7.1.1 through 3.7.1.4 of Resolution #1200 enacted in 1995 by SDV, broker-members of each stock exchange are responsible for establishing and maintaining a guarantee fund for the sole purpose of indemnifying investors for loss or damage caused by a broker-member or the stock exchange itself. The guarantee fund is the last resort for compensation of financial claims on default. Compensation should be attempted first through the financial insurance policy maintained by the defaulting brokerage house and, if this is insufficient, the broker’s seat on the exchange can be liquidated. The guarantee fund provides compensation under the following circumstances: When a brokerage house fails to make full payment either from the purchase or sale of securities registered with one of the stock exchanges; For the loss of securities registered at the stock exchange which occurs in the course of a brokerage mandate (executing a transaction); For the loss of registered securities as well as their profits/yields which occur within an administration agreement executed by a third party. The liability of the guarantee fund is limited to 30% of the fund’s capital, and the fund will only indemnify 85% of the claim, excluding any type of expenses, interests, fees, or other charges.
4.	Are the stock transfer agents (share registrars) linked electronically to the depository?	Colombia does not have stock transfer agents; shares are registered by the issuing companies. Most issuers are electronically linked to the depository. In the future, all issuers will be required to be on line with the CSD or to sign an agreement for the CSD to administer its books.
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?	Ownership in Colombia is based on trade date. For physical trades, registration takes from 10 to 15 business days. Securities settling through DECEVAL are registered in the issuer’s books within 24 hours of settlement. Registration for DCV held instruments (Government fixed income) occurs simultaneously with the settlement of the transaction. The market adheres to these deadlines.
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 rights as of trade date.
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 Colombia. Physical attendance is required for casting a vote.
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?	Yes, the Colombian securities market laws include binding rules for specific events. AGMs must be held during the first quarter of the year and should be announced 15 business days before the event takes place. The Superintendency of Securities must give prior approval for tender offers and voluntary corporate action events.
9.	Are all voluntary corporate actions advised through a central mechanism assuring consistent information to all investors?	All corporate events are announced in the national newspapers. Information is also available on the web sites of the Superintendency of Securities and the stock Exchanges.
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?	As stated above corporate events are announced in the nationally distributed newspapers, as well as the web sites of the Superintendency of Securities and stock exchange. Corporate events are announced 15 business days prior to the event.