Emerging Markets Rates and Currencies Handbook

Source: Citi indicative information Settlement may occur until there is availability of payment means in both the local and the foreign currency, usually at 16.00 local time for USDCLP transactions. Overdrafts are allowed only if the company has a credit line in place. Deliverable foreign exchange forwards are settled as spot trades upon maturity (T+0 — 24 or 48hrs both ccys). The BCCH maintains statistics of the inflow and outflows of currency and requires FX agents to report FX transactions. Market opening hours and liquidity during the day Fixing The “Dolar Observado”, or just Observado, is the Chilean exchange fixing rate against the USD. It is the weighted average rate of the spot transactions traded on the formal exchange market between 9.00am and 1.30pm of the previous business day. The Observado is published daily by the BCCH around 18.30 of the previous day. Observado Bloomberg Ticker: {CLFXDOOB Index} Regulation Offshore Restrictions: Onshore and offshore markets are separated markets. We can manage the fixing execution of an offshore transaction in the onshore market as a way to replicate a delivery of an NDF transaction offshore. There is no constraints otherwise for an offshore counterparty to trade with local banks. Offshore counterparties can access the local spot market through Exempt Resolution 150. Non-Resident Restrictions: Non-residents can operate in Chile through the Spot market under the regime of Exempt Resolution 36 (local tax authority) which implies having a local tax agent. There are no restrictions to operate through NDFs. On December 24th, 2020, the BCCH modified the compendium of Foreign exchange regulations, allowing the following cross border operations in CLP: As of March 1st, 2021: Derivatives products with physical delivery in CLP Current accounts in CLP for Non-Domiciled and Non Resident investors. Credits from persons domiciled or resident in Chile to persons resident or domiciled abroad in CLP. As of Sep 1st, 2021: Persons domiciled or resident in Chile depositing or investing abroad CLP. Persons not domiciled or resident in Chile granting credits, deposits, investments and capital contributions in Chile. License Requirements No licenses are required. Requirements to open a foreign currency account Every person in Chile has the right to freely engage in foreign exchange transactions with no restrictions from the local government. It is possible to open a local USD account in Chile. Deal Management Rollover: Rollover at market prices. Unwinding: No restrictions to unwind derivatives. Full liquidity to do unwinding under the combination currencies and tenors detailed above. Early Maturity: Parties can agree early termination clause at inception under Condiciones Generales contractos de Derivados en el Mercado Local (local ISDA) or ISDA (in case a counterparty is an offshore entity). Documentation Requirements The BCCH requires all transactions to be reported by the dealer institutions for statistical and tax purposes. For NDF transactions there are no restrictions. In case of FX Spot transactions, a more regulated process monitors non-resident counterparties entering the local market. For trading derivatives locally, Condiciones Generales Contratos de Derivados en el Mercado local is required in a standard format by all banks and recognized by BCCH. For trading derivatives offshore, the client would require an ISDA. Foreign exchange inflows and repatriations performed by investors under Exempt Resolution 150 regime, must be executed with participants of the formal foreign exchange market. As per Central Bank regulation, as of March 1st 2021, foreign entities can open CLP current accounts in Chile. Trade Flows Trade flows are not subject to any restrictions. The only obligation is to inform the Central Bank the code of each transaction for statistical purposes (the information to the BCCH is provided by the banks).