Payment System

Central Securities Deposit - CSD

Objetives Legal Framework Access Payments and Rates for Services Services Statistics

Objetives

The Central Securities Deposit (CSD) is a computerised system designed to administrate the securities issued or managed by the Banco de la República (The Central Bank of Colombia), by means of electronic records. Its objectives are to eliminate the risks of handling physical paper, to speed up transactions in the Secondary Market, and to facilitate the payment of principal and/or interest coupons.

Dematerialized securities of the same type, with the same characteristics, financial conditions, and issue and maturity dates, are fungible.

• Communication with/from participants: Real time via workstations..
• Previous matching of transactions for securities transfers and repos.
• RTGS Real time gross settlement
• All securities are dematerialised
• Delivery versus Payment Model One (Gross and simultaneous settlement of cash and securities)
• Settlement on T+0.
• Same day funds for settlement.
• Settlement finality.
• CSD holds most of the public debt issued by the nation.

Decree 436 of February 19, 1990, created the Banco de la República’s Central Securities Deposit (CSD) and assigned its functions.
Decree 437 of March 10, 1992, provided additional rules about the Central Securities Deposit.

Article 21 of Law 31 of December 29th 1992, and Decree 2520 of December 14th 1993, stated that Banco de la Republica would manage a Securities Deposit, to hold securities issued by Banco de la República, as well as securities other than stocks, that are substitute or mandatory investments for corporations that are supervised or inspected by the Banking Superintendence.

By means of Resolution No 314 of June 7 of 2001, the Securities Superintendence approved the regulation governing theCentral Securities Deposit

Mainly Legal Regulations related to the Central Securities Deposit.

Issuers can hold securities in the CSD by signing a contract of "Securities Under Administration".

By means of this contract, the CSD will be responsible for the custody, administration and registration of any transfers of ownership, as well as taxes on deposited securities.

Who may have access to the CSD

Entities under the surveillance and inspection of the Banking Superintendence or Securities Superintendence as well as public entities, may have access as direct depositors to the services provided by the CSD. Individuals and corporations other than those mentioned above may have access to the CSD as indirect depositors, through a direct depositor.

Mechanisms

Payments of matured principal coupons in favour of direct and indirect depositors are automatically credited in the current account of the direct depositor at the Banco de la Republica. If the direct depositor does not have an account with the central bank, payment will be made by means of a cheque.

Fees

This fee scheme is valid since January 2001

The fees are applied in proportion to the time the security remains deposited in the CSD.

CSD users have access to the following services:

• Primary investment of dematerialised securities issued or administrated by the Banco de la República.
• Physical security deposit (de-materialisation).
• Transfer of dematerialised securities, for buying or selling transactions, with or without cash settlement
• Constitution and liberation of guarantees amongst account holders.
• Automatic payment at maturity of the corresponding value of capital & interests, once the issuer places the resources
• On-line information of securities deposited.
• REPO operations with or without cash settlement.

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