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LATIN CLEAR offers its Participants custody services for securities using a method of inmovilization or dematerialization (book entry tranfers), in a safe environment, including vaults and a system permitting efficiency and safety in securities consignment. Around the 99.8% of Balances under custody, as of December 2003 were inmobilized or dematerialized. The systems designed to receive securities are characterized by the special care taken to establish strict controls to safeguard them. In the same way, LATIN CLEAR has a vault that meets the standards adopted by the banking industry, fire-proof filing cabinets, an optic disc system to scan the physical securities coming into custody, contingency systems for hardware and software, closed circuit cameras, periodic audits performed by both in-house and outside auditors to minimize the risks in the custody of securities. Additionally, we hold a securities replacement policy and a Fidelity Bond policy with AIG Panama, 100% subsidary of AIG-USA, one of the insurance industry's most solid companies in the United States, with a AAA rating by Moody's Standard and Poor.
This instrument, called "Global Note" rests in LATIN CLEAR's vault, with the advantage of eliminating the removal of certificates and all the risks that go along with it. The investor is then given a certificate of ownership of, or name on, the securities from their Broker, and periodically receives an account statement with details about their securities prepared by their Broker. For the issuing business, the issue of Global Notes has enormous advantages such as the notable reduction in the costs of issuing, vaults, issue of physical certificates, insurance, and other intangible costs involved in the whole process of issuing securities. At the same time, the risks of robbery, loss or falsification of the securities is minimized since the Global Note is a negotiable instrument, valid only to the issuer under contract for it with LATIN CLEAR.
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