Market Link Guide - Uruguay

03.07.2020

Key features

CSD link as defined under CSDRa

Yes

Type of link

Indirect link through Banco Itaú Uruguay S.A. to:

Central Bank of Uruguay as Central Depository for government debt.

a. CSD Regulation (EU) No 909/2014, Article 2(29).

CSD

Custodian

Name

Central Bank of Uruguay, “CBU”

Banco Itaú Uruguay S.A.

FATCA GIIN

Not available

DI5KU3.00040.ME.858

LEI

Not available

549300M5MYAD51WHJD55

Country of incorporation

Uruguay

Uruguay

Account type

Omnibus account

Omnibus account

Legal account name/holder

Banco Itaú Uruguay S.A.

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.

Operational arrangements

Yes/NoRemarks
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.

Bridge settlement

No

 
Shaping facility

No

 
Partial settlement

No

 
Settlement penalty fees

No

 
Pre-matching

Yes

 
Back-to-back processing

No

 
Allegements

No

 
Automatic compensation

No

 
Registered securities

Yes

 
Multi Market Securities

No

 
Lending and borrowing

Yes

For debt securities only.

Proxy voting

No

 
Investment Funds

No

 
Liquidity Hub Connect

No

 
Sale and purchase of rights

No

 
Repo services

Yes

 
Market restrictions

No

 
FTT

No

 
Daily reconciliation

Yes

 

Moment of entry

Moment of entry is determined when the transaction has been accepted into the system.

IrrevocabilityInstructions can be cancelled unilaterally. Settled instructions are irrevocable.

Settlement finality

Settlement in the Central Bank of Uruguay system is final and irrevocable.

Legal arrangements

The below section is based on the legal opinion that was issued on 6 April 2020. 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

Confirmed.

Liability for negligence

Confirmed.

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

Confirmed.

Segregation of assets at the Custodian

Confirmed.

No right of use

Confirmed.

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 

Confirmed.

Shortfall pro-rated among holders

Shortfall is not regulated under local law.

Record keeping period of at least 10 years

Confirmed

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.