Creation Link Guide - Uruguay
CSD link as defined under CSDRa
Type of link
Indirect link through Banco Itaú Uruguay SA to :
Central Bank of Uruguay as Central Depository for government debt.
a. CSD Regulation (EU) No 909/2014 art. 2 (29)
Central Bank of Uruguay, “CBU”
Banco Itaú Uruguay S.A.
Country of incorporation
Legal Account name / holder
Banco ITAU Uruguay SA
Account opened for third parties and known as “Non Resident” assets
Banco Itaú as the participant in the Central Bank of Uruguay does not hold an individually segregated account for CBL.
Clearstream Banking S.A.
|Settlement free of payment||Yes|
|Settlement against payment||Yes|
|Settlement against payment in central bank money account of CBL/CBL customers||No||CBL holds a cash account at the custodian. Against payment settlement takes place on the custodian’s account at at the local central bank.|
|Settlement penalty fees||No|
|Multi Market Securities||No|
|Lending and borrowing||Yes||For debt securities only.|
|Liquidity Hub Connect||No|
|Sale and purchase of rights||No|
Settlement in the Central Bank of Uruguay system is final and irrevocable.
The below section is based on the legal opinion that was issued on
1 March 2017. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.
No insolvency proceedings against the Custodian
Liability for negligence
Book-entry regime with in rem rights
CBL has a contractual right against the custodian regarding the securities held in custody by the custodian on behalf of CBL. A contractual right is not similar to a right in rem. On the contrary, the right in rem confers a direct right over the securities while the contractual right confers a "personal" or "contractual" right that, in this case, will be against the custodian.
Recognition of nominee concept
Confirmed. CBL will be recognised as account holder of the account(s) held in its name but on behalf of its underlying customers. However, precision that under local law does not recognise the nominee concept, as beneficial owners do not have a direct claim over the securities. Beneficial owners only have a contractual right against the nominal owner (the custodian in this case) to recover their securities deposited with the custodian or to receive the proceeds thereof.
No right of retention to the custodian
Segregation of assets at the Custodian
No right of use
No upper-tier attachments
Local law does not address the upper tier attachment of securities involving entities such as the custodian. Upper tier attachment does not exist in Uruguay.
Insolvency of the custodian with no impact on CBL's rights
Shortfall pro-rated among holders
Shortfall is not regulated under local law.
Settlement finality in case of insolvency
The Insolvency Act does not provide for the irrevocability and unconditionality of non-provisional transfers and that in certain scenarios a transfer of securities could be challenged in the context of a bankruptcy. However, Law 18573 provides some protective wording as regards to irrevocability of instructions in case of insolvency only to instructions made within the scope of a compensation and liquidation system of payment and securities. Said protection can only be analysed on a case-by-case basis.