Chilean Capital Market

1 CHILEAN CAPITAL MARKET
DOING BUSINESS
IN THE CHILEAN
CAPITAL MARKET

This document has been prepared by constituents of the Chilean securities
market, coming together in an effort to provide the investment community
withdetailedinformationabouttheChileanmarketprofileanditsconvention.
This work group has included information regarding; Equity, Fixed Income,
Money Markets and Derivatives, while also discoursing on Over The Counter
products and the institutions that are charged with providing infrastructure
for the Chilean capital market.
The information contained in this document was expressed in good faith
and it was based on our experience in the industry; however, we make no
representations and we give no guarantee as to the accuracy of its contents,
completeness of information, facts and/or opinions contained herein.
We appreciate the participation of:
Bolsa de Comercio de Santiago, Santiago Exchange
Banco Itaú-Corpbanca
Banco de Chile
Banco Santander
Banchile Corredores de Bolsa
BTG Pactual Corredores de Bolsa
Larraín Vial Corredores de Bolsa
IM Trust Corredores de Bolsa
CCLV
Depósito Central de Valores (DCV)
INTRODUCTION

CONTENTS
CHILEAN MARKET STRUCTURE
REGULATORY ENTITIES
EXCHANGES, CENTRAL SECURITIES DEPOSITORIES AND OTHER PARTICIPANTS
EXCHANGES
CENTRAL DEPOSITORIES
CLEARING HOUSES
MARKETS AND INSTRUMENTS
MARKETS
INSTRUMENTS
INTERNATIONAL INVESTORS & THE CHILEAN MARKET
LEGAL FRAMEWORK
REQUIREMENTS, DOCUMENTATION AND PROCEDURES
COMPLIANCE
TAX REGIME
TAX TREATIES
TRANSACTIONAL PROCESS
CLEARING AND SETTLEMENT
INCOME, CORPORATE ACTIONS & PROXY VOTING
APPENDICES
GLOSSARY AND ACRONYMS
RELEVANT LINKS
1.
1.1.
1.2.
1.2.1.
1.2.2.
1.2.3.
1.3.
1.3.1.
1.3.2.
2.
2.1.
2.2.
2.3.
2.4.
2.5.
3.
3.1.
3.2.
4.
4.1.
4.2.
MARKET DATA

The Ministry of Finance is the leading administrative department for all financial system regulation and participants. The Minister
of Finance is appointed by the President.
Market regulators report directly to the Ministry of Finance.
1.1 REGULATORY ENTITIES
SUPERINTENDENCIA DE VALORES Y SEGUROS (SVS)
The Chilean Superintendence of Securities and Insurance (Superintendencia de
Valores y Seguros, SVS) is an autonomous agency related to the Government
through the Ministry of Finance. It holds primary responsibility for enforcing
Chilean securities laws, proposing rules for the trading of securities, and
regulating the securities industry, the nation’s stock exchanges, and other activities and organizations, including the electronic
securities markets in Chile. The SVS fulfills the following roles:
▶ Supervision: Surveillance and control of laws, regulation and administrative norms.
▶ Regulation: Dictates administrative norms for the market and supervised entities.
▶ Sanctioning power: It has the ability to impose penalties for compliance breaches.
▶ Development and promotion of markets: It promotes initiatives in order to encourage market development through the
collaboration in the creation and promotion of new instruments.
Some of the entities under the oversight of the SVS are the companies that have issued publicly offered securities, insurance
companies, mutual funds, broker-dealers, “agencias de valores”, foreign and local investment funds, stock exchanges and the
central depository. By legal mandate, the SVS maintains 21 public records.
SUPERINTENDENCIA DE PENSIONES (SP)
The Chilean Superintendence of Pension Funds (Superintendencia de Pensiones,
SP) is a Chilean government agency that aims to ensure the proper functioning
of the Pension Fund Administrators (AFP), the Social Security Institute (IPS) and
the Unemployment Fund. The agency is also responsible for supervising the
Medical commission in charge of the disability qualification board which assesses eligibility for disability pensions in either the
private or government run pension system.
1 CHILEAN MARKET
ESTRUCTURE

SUPERINTENDENCIA DE BANCOS E INSTITUCIONES FINANCIERAS (SBIF)
The Superintendence of Banks and Financial Institutions (Superintendencia
de Bancos e Insitutuciones Financieras, SBIF) is a public, autonomous agency
related to the Government through the Ministry of Finance. By mandate of
the General Banking Law, the SBIF supervises banking institutions as well as
other entities, to safeguard the interests of depositors or other debtors and the public interest. Its mission is to seek the good
functioning of the banking system.
BANCO CENTRAL DE CHILE (BCCH)
TheCentralBankofChile(BancoCentraldeChile,BCCh)isanautonomousentityof
technicalnature,andhasasitspurposestolookafterthestabilityofthecurrency,
that is, to keep inflation low and stable over time. The Bank must also promote
the stability and efficacy of the financial system and the normal functioning of
internalandexternalpaymentsystems,togenerateapredictableenvironmentfordecisionmakingofeconomicagentscontributing
to reduce the ups and downs of the economic cycles, thus providing a solid basis for the country´s permanent growth.
For these purposes, the powers of the Bank include that of regulating money supply and credit in circulation in order to provide
an adequate stock of money for individuals, firms and institutions and thus assure their transactions.
1.2 EXCHANGES, CENTRAL SECURITY DEPOSITORIES AND
OTHER PARTICIPANTS
1.2.1. EXCHANGES
All three exchanges in Chile are broker organizations of a mutual nature. Bolsa de Santiago has already embarked in a demutua-
lization process which is expected to be completed in 4Q16. Listing is non-exclusive and most stocks are listed on all exchanges.
The exchanges and their respective estimated market share on traded volumes in the equity market are as follows (data as of
October 2016):
▶ Bolsa de Comercio de Santiago, “Bolsa de Santiago” (Santiago Exchange): 93.16%
▶ Bolsa Electrónica de Chile, “BEC” (Electronic Stock Exchange): 7%
▶ Bolsa de Corredores de Valparaíso (Valparaiso Brokers’ Exchange): 0.03%

Broker-dealers are required by law to be domiciled in a physical address, continuously maintain a minimum net worth of 6,000 UF
for when acting solely as a broker and 14,000 UF for a broker-dealer, to constitute legally required guaranties, to not have been
ever cancelled from the Registry of Stockbrokers and OTC dealers, to not have entered bankruptcy proceedings, and to comply
with the SVS rules and regulations (several conditions on legal entities).
Tradersmustalsocomplywithasetofrequirementsinordertoperformedsaiddutiessuchas,beingoflegalage,tohavecompleted
a college education and to have a clean criminal record.
Bolsa de Santiago (Santiago Exchange)
Address La Bolsa 64, Santiago
Telephone 56 2 2399 3000
Internet URL www.bolsadesantiago.com
Ownership Santiago Exchange is owned by its participant brokers
Year Established 1893
Traded Instruments
Equities, fixed income and money market securities, Investment Funds Shares, ETFs, US
Dollars and gold coins
Trading System HT Platform
Trading Hours
Mar – Oct: 9:00 am – 4 pm
Nov – Feb: 9:00 am – 5 pm
Listed Companies 225
Exchange Members 25 active brokers
Guarantee Fund N/A

Trading on the Santiago Exchange is electronic and continuous for all equities, fixed income and derivatives. These securities are
traded on the HT Trading Platform. Trading hours are:
1) 9:30 AM - 4:00 PM: From March to October (for fixed income from 9:00 am).
2) 9:30 AM - 5:00 PM: From November to February (for fixed income from 9:00 am).
3) Low presence securities are traded continuously from 9:30 to 16:30 electronically. Physical special auctions are conducted
under open outcry at 11:20, 13:20 and 16:30.
4) On the Exchange, fixed income instruments are normally traded through auctions. Trading sessions for fixed income instru-
ments are held in accordance to the following timetables: 10:30 - 10:40; 11:15 - 11:25; 12:00 - 12:10; 12:45 - 12:55; and
16:15 - 16:25.
5) Futures contracts are traded continuously from 8:30 to 16:00 electronically; US Dollar / Chilean peso FX trading futures are
traded from 8:30 to 14:00 hours.
Execution respects the First In, First Out procedure, based on price and time.
Santiago Exchange Indices
Name Índice General de Precios de Acciones, IGPA
Composition Most actively traded stocks
Base Amount (Year) 100 (1980)
Name Índice de Precios Selectivos de Acciones, IPSA
Composition 40 most actively traded stocks
Base Amount (Year) 1,000 (2002 - end)

IPSA constituents are is reviewed on an annual basis to reflect the 40 most traded equities.
The first portfolio valid from September 2015 to September 2016 comprises 12 IPSA companies.
Name S&P Dow Jones Sustainability Chile Index, SPDJI Chile
Composition
Companies among IPSA representing 40% of the Total Sustainability Score (TSS) based on
Robeco Sam Methodology
Base Amount (Year) 1,000 (Sept 10. 2014)
Bolsa Electrónica de Chile “BEC” (Electronic Stock Exchange)
Address Huérfanos 770, Floor 14
Telephone 56 2 2639 4699
Internet URL www.bolchile.cl
Ownership BEC is owned by its participant brokers
Traded Instruments
Equities, fixed income and money market securities; US Dollars
and pure gold coins
Trading System Electronic
Trading Hours 09:30 – 16:00 (17:00 in DST)
Guarantee Fund N/A

Trading on Bolsa Electrónica de Chile is electronic and continuous during the day. Auctions are also established in accordance to
predefined timetables.
On the electronic transaction system called SITREL you can trade and operate all financial instruments available on the market.
Furthermore, it is possible to obtain information about interest rates, exchange rate, CPI, UF, equity indices as well as delivering
information online BackOffice systems of its users. Another electronic transaction system is DATATEC for currency trading and
its derivatives. Banks & Broker-Dealers in the country are interconnected through this system allowing trading on the interbank
market dollar and extra banking.
Bolsa de Corredores de Valparaíso (Valparaiso Broker Exchange)
Address Prat 798, Valparaíso
Telephone 56 32 25 0677
Internet URL www.bovalpo.com
Ownership Owned by its participant brokers
Instruments Traded Equities and fixed income; USD and gold coins
Trading System Electronic
Trading Hours 09:30 – 16:00 (17:00 in DST)
Guarantee Fund N/A

Depósito Central de Valores S.A., (DCV) is a private Corporation established in accordance with Law 18.876; under the oversight
of the Superintendence of Securities and Insurance (SVS). DCV is authorized to accept publicly offered securities for deposit,
thus enabling the transfer of those securities among market participants in conformity with procedures established in the
aforementioned law.
The depository provides infrastructure for custody, settlement and other complementary services for the securities market, both
locally and internationally, meeting the highest standards of security, availability, efficiency and quality.
DCV, the Chilean central securities depository, supports the settlement, safekeeping and deposit of equities, money market and
most fixed income instruments including but not limited to bank bonds, debentures, all BCCh issuances, mortgage bonds and most
“bonos de reconocimiento” (old pension system bonds). Securities are either held in an immobilized or dematerialized fashion.
As mentioned above the DCV is subject to oversight by the SVS and has a minimum capital requirement of 30,000 UF. The SVS
has set the minimum guarantees or colateral needed by the DCV to be able to cover the securities held under custody, which is
0.1 percent of the value of the securities held. Current insurance policies have a deductible of USD 150,000 per event and a total
coverage of USD 240 million, which exceeds the lawful minimum requirement.
Depósito Central de Valores, S.A., (DCV)
Address Av. Apoquindo 4001, Floor 12, Las Condes, Santiago
Telephone 56 2 2393 9000
Internet URL www.dcv.cl
Regulator SVS
Participants 191
Securities Held Equities, Fixed Income and Money Market. Also, Trade Repository for OTC Derivatives
1.2.2. CENTRAL DEPOSITORIES

In addition, the DCV is subject to Ministry of Finance’s Supreme Decree No. 734, which provides additional regulations related to
the operation of depositories, as well as its own internal regulations, which have been approved by the SVS.
DCV SHAREHOLDER STRUCTURE:
▶ 30 percent Sociedad Interbancaria de Depósito de Valores S.A. (an association of banks);
▶ 30 percent Inversiones DCV S.A. (an association of pension funds);
▶ 23 percent SANTIAGO EXCHANGE;
▶ 10 percent DCV Vida S.A. (an association of life insurance companies);
▶ 6 percent Inversiones bursatiles SA;
▶ 1 percent Valparaiso Stock Exchange and others
ThroughitsSecuritiesDepositorybusinessunit,DCVprovidesitsparticipantswithasecuritiesregistration,transaction,settlement
and custody service. In subscribing the two Securities Depository Services (through the signing of a contract and/or appendix),
participants may, among other things, safeguard their investments, make transfers of securities through diverse transactions,
receive payment of rights associated with securities under custody, provide third-party custody, conduct physical and demate-
rialized issuances and settle securities transactions through the electronic payment system, etc. Participants may also open
segregated accounts in the name of final beneficial owners.
One of DCV’s purpose is to electronically process and register transfer transactions on the exchange and the over-the-counter
market, and coordinate and provide the necessary information for financial settlement of such transactions.
The DCV has been appointed as the official numbering agency for ISIN codes, but such codes are available mostly for stocks.

Contraparte Central S.A., (CCLV)
Address La Bolsa 64, Floor 2, Santiago
Telephone 56 22 399 3380
Internet URL www.cclv.cl
Regulator SVS, Superintendence of Securities and Insurances
Participants Banks licensed to operate in Chile
Securities Held N/A
The Contraparte Central de Liquidación de Valores, CCLV (“Central Counterparty Clearinghouse”) went live on 1 September 2010
as per the enactment of Law N° 20,345. The CCLV is designed to administer the clearing and settlement systems of financial
instruments for equities, derivatives, fixed income, money market and stock repos. CCLV replaced the former Clearing and
Settlement System for brokers (SCL).
The CCLV provides clearing and a settlement system; implements risk management and enforce regulation for the clearing and
settlement of securities. Brokers that do not comply with rules and regulations related to the clearing and settlement of securities
could be subject to fines or other administrative penalties particularly when it comes to the timely settlement of securities and
liquidity. The CCLV is a subsidiary of the Bolsa de Comercio de Santiago (Santiago Exchange), the exchange holds a 97.27 percent
ownership and the remaining 2.73 per cent is split between participant brokers.
1.2.3 CLEARING AGENCIES

Comder Central Counterparty aims to provide financial market clearing and settlement of OTC derivatives serving as Central
Counterparty, Clearing House and other complementary services, applying BIS-IOSCO recommendations. Comder provides a
high-security technological platform to ensure real-time operations with capability to monitor and control operational risk, to
accept or reject clearing orders depending on the fulfillment of operational requirements and guarantees. The company began
operations in 2015, providing services for Non-Delivery Forwards (NDFs) for CLP, CLF and USD transactions. The second stage will
cover Interest Rate Swaps.
Comder Contraparte Central S.A.
Address Cerro Colorado N°5240, Edificio Torre del Parque I, piso 18, Las Condes. Santiago de Chile
Telephone 56 2 28879900
Internet URL www.comder.cl
Regulator SVS
Participants 14 banks
Securities Held OTC Derivatives

The clearinghouse operates payments under a deferred multilateral netting model, using bilateral limits defined by the partici-
pants instead of actual balances. These bilateral limits are defined daily at the beginning of operations by each participating bank.
Banks constitute guarantees in a special purpose account at the Central Bank of Chile based on the limits they have granted other
participants; each bank deposits an 11.5 percent of the highest bilateral limit granted for the day. Likewise, the system establishes
a multilateral limit, defined as a 10 percent of the sum of all bilateral limits received by any given participant. This limit is enforced
as the maximum exposure to the system for such participant and it is always smaller than the sum of the guarantees in the Central
Bank account payments are always performed in compliance to both bilateral and multilateral limits.
Therefore, the guarantees would always cover the highest maximum exposure of any given participant.
The system has a loss-sharing agreement to mitigate counterparty risk within the clearinghouse, to cover the difference between
the guarantee funds of the defaulting party or parties and the total exposure. Losses are shared in the proportion the surviving
participants gave limits to the defaulting ones.
▶ DVP Switch:
The module known as the Switch is a facility within AIPAC operated by COMBANC, based on SWIFT messaging and the payment
systems that operate in Chile. The Switch intends to achieve delivery versus payment between the securities, held at the DCV,
and the cash, which is handled either via LBTR or ACH.
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor, COMBANC S.A.
Address Huerfanos 770, Floor 16, Santiago
Telephone 56 2 2731 7500
Internet URL www.combanc.cl
Regulator Central Bank and SBIF
Participants Banks licensed to operate in Chile
Securities Held N/A

Other Trading Instruments
▶ OTC Market
There is no formal over-the-counter (OTC) exchange in Chile; off-exchange trading takes place between allowed parties directly
without being subject to exchange operating hours and conditions. These transactions; however, are registered in the exchange
systems for statistical purposes only, but are not publicly available. Nonetheless, there is a relevant proportion of fixed income
and money market instruments that are traded OTC, especially bonds subject to the CGT exemption granted by Art. 104 of the
Income Tax Law. There was a significant increase in these transactions since the last modification to this regulation that permitted
to make use of the exemption without any special requirement in terms of the trading system or venue. There is an important sale
and repurchase agreement (repo) market, which is OTC. Participants in the OTC market only trade securities in UF. Most of these
liquid securities are traded at a discount. Such securities are issued in dematerialized form.
▶ Derivatives Market
There is no independent Derivatives Exchange in the Market; Derivatives are traded only on the Santiago Exchange. Santiago
Exchange has standardized listed IPSA futures, Dollar Futures, UF Futures, ICP Futures and BCU/BTU Futures.
1.3 MARKETS AND INSTRUMENTS
1.3.1 MARKETS
Currency and Money Market
▶ FX/Cash Management Considerations
There is no special restriction to repatriate funds, with the exception of ADR transactions under Chapter XXVI of the Compendium
of Foreign exchange Regulations.
The Central Bank of Chile established a flexible rate of exchange, which is completely defined by the interaction of the market
players. However, it holds the authority to intervene the exchange market when the exchange rate does not comply with the long-
term fundamentals set by the overall state of the economy. These interventions are exceptional, substantiated and transparent;
and its terms, amounts are explicitly defined. Since the flexible exchange rate regime was initiated in 1999, there have been 4
episodes of intervention in the currency market, being the last in year 2011.
Under Central Bank regulation, foreign investors are not allowed have any type of indebtedness in local currency (including over-
draft facilities).

Foreign investors under Res. 36 are neither allowed to invest in local currency. Therefore any FX transaction must be linked to a
securities transaction.
▶ Currency Market and FX Controls
TheChileancurrency,theChileanPeso,(CLP)hasanapproximateexchangerateofaround651.6(ObserveddollarasofOctober2016).
The Unidad de Fomento (UF) is an adjustable measure based in the variation of the Consumer Price Index. It is adjusted on a daily
basis and is calculated at the beginning of each month for the period between the 10th of this month and the 9th of the following
month, according with the variation of the C PIof the former month, which is determined on a monthly basis by the National Insitute
of Statistics (Instituto Nacional de Estadísticas, INE).
Main regulations on foreign exchange transactions and foreign investment are contained in the Compendium of Foreign Exchange
Regulations, whose Chapter XIV (the Chapter XIV) regulates foreign investments and loans. The regulation comes to encompass
obligations to perform certain transactions in the foreign exchange market and to report certain transactions and flows therein.
The exchange rate is free floating and determined by the market conditions.
In Chile there is a Formal Exchange Market (Mercado Cambiario Formal, MCF) composed by commercial banks and some brokerage
houses especially authorized by the Central Bank.The MCF is under the oversight of the Central Bank and its members have addi-
tional controls and reporting obligations. Please note that foreign investors under Res. 36 are obliged to perform FX transactions
in the MCF. The BCCh is also allowed to participate in the MCF as a direct player.
Market deadline to close FX transactions is 13:00 local time both in the spot and forward market.
Transactions with value date 0, 24 or 48 are considered spot transactions. Transactions over t+2 up to 2 years are considered
future transactions.
Transactions with value date 24 or more require to have credit lines (in USD) available.
Income and capital gains can be repatriated at any time for Chapter XIV inflows performed after March 2001. Depending on the
market entrance vehicle, there are restrictions on the repatriation of capital.
Please note that there is no DVP system available for FX transactions. The settlement of FX deals is manual and the deadline
depends on the availability of payment systems both in USD and CLP, namely 4 PM local time

▶ Money Market
TheMoneyMarketincludeson-exchangetransactiononmoneymarketinstruments,andOTCtransactions.Moneymarketconsiders
short-term securities, that is, of less than one year of maturity. The most commonly traded securities are bank time deposits/certi-
ficates of deposit, government short-term bills and commercial papers.
Thereisnospecialrestrictionforforeigninvestorswheninvestinginmoneymarketsecurities,northereisanylimitationintheamount
of bids. However Central Bank auctions are only available for banks and some other institutional investors.
Thelocalmarketincludeson-exchangetransactionsandOTCdeals.TheBCSoffersacontinuoustradingofmoneymarketsecurities
duringitsnormaloperationhours.TheOTCsessionsarefrom9:30to14:00inthesamesystemusedfordebtinstrumentstransactions.
▶ Cash Accounts
Local cash accounts can be opened in the name of the investors, pursuant to local laws and regulations. Kindly note that under
CentralBankregulation,itisnotpossibletograntcreditinlocalcurrencytoforeigninvestors;overnightandintra-dayoverdrafts(in
foreign currency cash accounts), must be negotiated through an overdraft agreement under usual business and credit conditions.
Securities Markets
▶ Equity Market
Most of the outstanding equity is dematerialized and held under custody at the DCV. The vast majority of equity transactions in
the country is performed on the Exchange. The settlement is mostly via entry book (for assets held in the DCV), or exceptionaly
physically.
Transactionscanberegularcashtransactions(t+2)ortermtransaction(t+3tot+180).However,partiescanagreeinsettlingonT+1orT+0.
▶ Fixed Income Market
AsignificantportionoffixedincometransactionsisperformedOTC,althoughon-exchangesystemsareavailableaswell.Securities
of a maturity of less than one year are considered short-term and are usually settled t+0, although parties can agree T+0 or T+2.
Long-term securities (more than one year maturity) are usually settled T+1
▶ Derivatives Market
In August of 2015, Santiago Exchange launched the new futures market in Santiago Exchange, contracts that are cleared and
settled at CCLV Central Counterparty, subsidiary of Santiago Exchange. Liquidity for this market remains low; the Exchange has
been active in promoting this market and seeking liquidity providers.

▶ Foreign Securities Market
Thisisthepublicofferofforeignsecuritiesinthelocalstockexchangeknownas“MercadodeValoresExtranjeros”.Thesesecurities
(funds, shares, ETFs, etc) should have a sponsoring agent responsible for making them eligible for registration under the Foreign
Securities Registry. After that they can be negotiated and settled in the local market and keep the corresponding custody in the
Chilean CSD.
1.3.2 INSTRUMENTS
Equity
▶ Ordinary Shares
Companies that issue shares can be public (Sociedades Anónimas Abiertas) or private (Sociedades Anónimas Cerradas or Socie-
dad Por Acciones). Only the former are allowed to be traded on the Exchange, and are subject to the Chilean Financial Authority
surveillance and reporting obligations. They must also comply with certain requirements in terms of disclosure of financial and
corporate information, and corporate governance principles. In order to be listed, companies must be included in special regis-
tries maintained by the Chilean Financial Authority both for local (Registro de Valores) and foreign securities (Registro de Valores
Extranjeros), and also be listed in one of the local exchanges.
▶ Preferred Shares
Preferred shares are identified only by the series, not all companies issue Preferred Shares.
▶ Warrants
The current market regulation does not allow the issuance of warrants on shares.
▶ Depositary Receipt Programs
There are 12 Chilean depositary receipt programs on the American exchanges, whose ordinary shares represent approximately 28
percent of the capitalization of the equity market. Three of these programs are also listed on the Madrid Stock Exchange, under
LATIBEX and one is also listed on the Sao Paulo Stock Exchange.
▶ ETFs
ETFs are funds that track the performance of an index or an underlying asset and may be made up by a basket of securities, and
they trade like stocks. Among the ETFs listed on Santiago Exchange are the iShares by BalckRock, the “Market Vectors” by Van Eck
Global and the Purpose ETFs by Itaú.

▶ Investment Fund Shares
IFSharesareequityinstrumentsthatrepresentafractionoftheassetsofaninvestmentfund.AbuyerofanIFbecomespartowner
of the fund. The main difference between an IF and a mutual fund is that an investment fund has a specific investment timeframe,
a limited number of shares and the minimum investment is generally high.
Fixed Income
▶ Treasury Bills
These are short-term securities, zero-coupon and denominated in CLP. Some outstanding securities (known as PRC) can be split
based on their coupons to form zero-coupon securities. All these securities are issued in dematerialized form.
▶ Treasury Notes
The Ministry of Finance through supreme decree 38 of 03 April 2014 announces the launching of Treasury Notes for the first time.
▶ Government Bonds
Most liquid assets are issued by the Central Bank of Chile and the Treasury. These securities are dematerialized bonds that are
denominated in CLP, USD and CLF, with maturities up to 30 years., and are CGT exempt under Art 104.
The legacy state pension system also issues bonds that represent the pension funds under the pension system before 1081.
In 2013 the first GDN program was launched in Chile. The underlying assets are bonds eligible for Art 104 CGT exemption.
▶ Commercial Paper
These zero-coupon bills are issued in dematerialized form, traded at discount, and are locally known as “Efectos de Comercio”.
▶ Corporate Bonds
The vast majority of outstanding issues are in dematerialized form. Its discount and liquidity varies significantly, depending on
the size and credit risk of the issuer. Since 2014, corporate bonds are also applicable to Art. 104 CGT exemptions, provided that
certain conditions are met upon issuance. A list of exempt corporate bonds can be found in the BCS website.
▶ Other Debt Instruments
Are usually issued by banks; ordinary, subordinated and mortgage bonds. The liquidity is high and the market capitalization is
concentrated in mortgage bonds.

Derivatives
▶ Futures
In August of 2015, Santiago Exchange launched the new futures market in Santiago Exchange, contracts that are cleared and se-
ttled at CCLV Central Counterparty, subsidiary of Santiago Exchange. Futures contracts traded include the Selective Stock Price
Index (IPSA), US dollar/Chilean peso exchange rate and fixed income interest rates (UF, ICP and Central Bank/General Treasury)
as underlying assets.
▶ Options
Options were traded in the Santiago Exchange in 1994, but now there is not options market in Chile.
▶ Forwards
Are ad-hoc traded, since there is no significant secondary market. The Santiago Exchange launched in 2015 listed derivatives that
include the USD and interest rates as their underlying asset.
▶ Swaps
Are ad-hoc traded, there is no secondary market.

2 FOREIGN INVESTORS
AT THE CHILEAN MARKET
2.1 LEGAL BACKGROUND
SIMPLIFIED RUT APPLICATION PROCESS BY RESOLUTION 36
Resolution 36 from March 2011 enacted by Chilean tax authority (SII) is the simplified registration mechanism for international
investors. Individuals and legal entities not resident or domiciled in Chile who invest in the country in order to obtain income by
buying and selling shares in listed corporations, fixed-income instruments, instruments of financial intermediation and shares
in mutual funds or through certain contracts allowed in the scope of the resolution can use a simplified mechanism for obtai-
ning a RUT, the Chilean tax ID. Resolution 36 states that the investor must appoint an institution that act as custodian. If a cus-
todian is not used, investors may obtain a RUT through their brokers.
INTERNATIONAL PORTFOLIO INVESTMENT REGULATION BY BCCH
The Chapter XIV is the most widely used mechanism by direct portfolio investors in Chile; which is part of the Compendium of
Foreign Exchange Regulations of the Chilean Central Bank. The Chapter XIV regulates international investment for all financial
instruments. There are no portfolio diversification rules, no restrictions on repatriation time or any other specific restrictions
placed on Chapter XIV investment.
All inflows and flowbacks are informed to the Central Bank, but no prior approvals are currently required to perform either ope-
ration, except the performs under the Chapter XXVI, still valid only for ADR programs, that need prior approval by the Chilean
Central Bank.
INTERNATIONAL DIRECT INVESTMENT SCOPE
Res. 36 also permits foreign investors to take control of an issuer company provided that there is timely reporting to applicable
authorities and local custodian.
SECURITIES IDENTIFICATION SYSTEM
The Chilean market uses local codes as its securities identification system. Equities are identified by a short name and ISIN co-

des. Fixed income securities are identified by a short name, encoding issuer and kind of security, and the issue or maturity date.
ISIN codes are officially assigned to fixed income upon request. The DCV has been appointed the official numbering agency for
ISIN codes.
DCV provides the ISIN and the CFI codes, automatically, to all of the new issuances made by the Central Bank and Treasury, Cor-
porate Bonds, Shares and Investment Funds and for all the instruments deposited by the market. This information in registered
in the data base managing by ANNA through the web platform ASB (ANNA Services Bureau). In the DCV’s website has an upda-
ted list of ISIN codes in the section “ISIN Listing Assets”.
TheCFIcodesallowidentifythetypeofinstrumentandthefeatures about voting, transferrestrictions, payment methods,andsoon.
2.2 MAJOR REQUIREMENTS, DOCUMENTATION AND PROCEDURES
2.3 COMPLIANCE
COMPLIANCE AND ANTI-MONEY LAUNDERING (AML) PRACTICES
Foreign investors must comply with banking requirements in terms of Anti Money Laundering (AML) and financing of terrorism
preventive measures and controls. These measures are implemented in compliance with the American Patriot Act of year 2011.
The State Defense Council (Consejo de Defensa del Estado, CDE) created the Financial Analysis Unit (Unidad de Análisis Finan-
ciero, UAF) aimed st preventing the use of the financial, banking system and other economic industries in Chile for money laun-
dry and terrorism financing.
Inrelationtothe“ForeignAccountTaxComplianceAct(FATCA)” of theIRS, Chileand theUnited States celebrated anIntergovernmen-
talAgreement(IGA)modeltwo,inordertoimprovetheinterchangeof informationto prevent tax avoidanceof American citizens.
2.4 TAX REGIME
DIVIDENDS
Dividends are generally paid annually, semi-annually or quarterly, either directly by the issuer or by a designated agent bank.
Payment is made on pay date. In the former case, payment is normally effected by regular checks, while agents pay via direct
deposit in cash account, regular and cashier’s checks as well as via electronic fund transfers, in accordance to the holder’s prefe-
rence. Entitlements are based on traded positions, while payment and taxation are based on settled positions as of record date.
If the party receiving the actual dividend check is not the beneficial owner, power of attorney is required to establish that the
party is expressly authorized by the beneficial owner for the purpose of dividend collection. The power of attorney must be
directly executed by the beneficial owner or by his legal representative.

Shares are traded both cum- and ex-dividend, although the former constitutes the market practice, the latter is the most
appropriate way of trading for most foreign investors, as the withholding tax is assessed on settled positions, while entitle-
ments are computed on traded positions. This situation may result in tax liabilities and in delays in obtaining tax certificates,
which are needed for dividend repatriation.
Claimsareamarketpracticeandcommonwhensecurities aretraded around record date. Thereareno predefined marketprocedu-
res,normallyaclaimisfiledwiththebrokerdeliveringpositions traded cum-dividend and forwhichno incomehas beenreceived.
INTEREST
Bondinterestisusuallypaidquarterly,semi-annually,orannually. Designated agents paycoupons and maturities, basedon listsof
holdersprovidedbytheDCVtotheissuers.Paymentisperformed viadirect deposit incashaccount, regularand cashier’schecksas
wellasviaelectronicfundtransfers.
Capital Gains Dividends / Interests
Equity
ZERO
• For high liquidity stocks and ETFs,
>= 25%
• For stocks and ETFs with market
makers 35%
• For other instruments
35%
Fixed Income
For long-term debt instruments
issued in Chile
ZERO
• For instruments under Art 104, Chilean
Income Tax Act
35%
4% additional
• For instruments admitted under Art
104
35% additional
Derivatives ZERO

TAX STRUCTURE FOR INTERNATIONAL INVESTMENT
A particularlyimportantcharacteristicthereofistheirstatus onmeetingthe“exchangepresence” criteria. On1 February2012,the
SuperintendenceofSecuritiesandInsurancechanged therequirements forshares of stockto beconsidered to haveExchangePre-
sence,byraisingthedailytransactionvaluefromCLF200to CLF1,000and introducingthepresenceof aformal “marketmaker”as
anoptiontocomplywiththedefinedconditions.ExchangePresencepublicationbyexchanges and thetreatment formergers,spin-
offs,seriesofsharesandthemarketmakerroleitselfhavebeenredefined and clarified. Theproportionof days incompliancewith
thedefinedminimummayvaryonadailybasis;thereforeastocknot highlytraded mayloseits status at anytime. Thelistofshares
thatcomplywiththisrequirementcanbefoundontheSantiago Exchangewebsite, alongwiththeactual percentageofdaysover the
tradingthreshold,toobtainanideaofthevolatilityoftheirstatus.
2.5 TAX TREATIES
DoubleTaxationAvoidanceTreaties(DTATs)intendtoavoid thedoubletaxation, bywayof usingtheCredit System(Thatis,thetaxes
paidinoneofthePartyStates,areconsideredasacredit intheotherPartyState). TheseDTAT imposesomelimits intaxation,depen-
dingontheeconomicactivitythatissourceofincome,and inthestatus of thetaxpayer. Thetax forlocal taxpayers (statutoryrate) is
appliedtoDTATinvestorsifitmorefavorabletothetaxpayer. It is important to notethat, undertheso called “ChileClause”,thetaxrate
ofWithholdingTaxondividendsisnotapplicableiftheCorporateTax paid bythecompanycanbeused as acredit againsttheAdditio-
naltaxtobepaidbytheforeigninvestor.

3.1 CLEARING AND SETTLEMENT
Settlement in Chile is not a real DVP system, since the payment system (Real Time Gross System, RTGS) or High-Value Netting
Clearinghouse (AIPAC) lies in a separate platform than the transfer of assets (DVP Switch of the DCV). However, these systems
are highly coordinated and the risk of investors is significantly low.
Under the Broker –to-investor scheme, the transfer of assets is done on a gross basis during the day. After the transactions have
been entered into the DCV system and matched the CV holds the securities in a “retained” status until payment. Once the cash
systems confirm that the funds have been transferred, the DCV automatically transfers the assets to the recipient’s account and
the settlement is final and irrevocable.
The Committee on Payment and Settlement Systems of the Bank for International Settlements (BIS) has identified three common
structural approaches or models for linking delivery and payment in a securities settlement system. Model 1 - Gross, Simultaneous
Settlements of Securities and Funds Transfers. Model 2 – Gross, Settlements of Securities Transfers Followed by Net Settlement
of Funds Transfers. Model 3 - Simultaneous Net Settlement of Securities and Funds Transfers. Models 1 and 2: Used for all tran-
sactions that are settled through DVP system (high-value electronic payment with ComBanc) Model 3: Used by CCLV.
Model 1 - Gross, Simultaneous Settlements of Securities and Funds Transfers. These systems settle transfer instructions for
both securities and funds simultaneously on a trade-by-trade (gross) basis, with final (irrevocable and unconditional) transfer of
securities from the seller to the buyer (delivery) occurring at the same time as final transfer of funds from the buyer to the seller
(payment). The settlement system maintains security accounts and fund accounts for participants. Transfer of securities and cash
aremadebybook-entry.Model2-GrossSettlementsofSecuritiesTransfersFollowedbyNetSettlementofFundsTransfers.These
systems settle securities transfer instructions on a trade-for-trade (gross) basis, with final transfer of securities from the seller
to the buyer (delivery) occurring throughout the processing cycle, but settle funds transfer instruction on a net basis, with final
transfer of funds from the buyer to the seller (payment) occurring at the end of the processing cycle. The securities settlement
system maintains securities accounts for participants, but funds accounts are usually held by another entity (often a commercial
bank or the central bank). Securities are transferred by book-entry, such transfer being final at the instant the entries are made on
the securities settlement system’s books. The corresponding funds transfers are irrevocable, but not final. During the processing
3 TRANSACTION
PROCESS

cycle, the system calculates running balances of funds debits and credits, the balance being settled at the end of the processing
cycle when the net debit and net credit positions are posted on the books of the commercial bank or central bank that maintains
the funds accounts. Settlement of funds accounts may occur once a day or several times a day. Model 3 - Simultaneous Net Sett-
lement of Securities and Funds Transfers. These systems settle transfer instructions for both securities and funds on a net basis,
with final transfer of both occurring at the end of the processing cycle. Settlement may occur once a day or several times a day.
The securities settlement system maintains securities accounts for participants. Funds accounts may be maintained by another
entity, either a commercial bank or the central bank.
Chilean Peso (CLP) /USD credit facilities to resident investors as well as USD facilities to non-resident investors can be granted
provided that applicable documentation requirements are met. Therefore, foreign investors need to fund their accounts prior to
Settlement Date.
Change of Beneficial Owner free transfers are rarely done in Chile, due to taxation matters. No Change of Beneficial Owner (NCBO)
free transfers are allowed as long as the NCBO condition is properly evidenced from a legal standpoint before the Tax Authority.
Notice that Change of final beneficial ower free of payment does always have tax implications.
As sub-custodian this is not a permitted action.
In September 2010 the Santiago Exchange created the clearing and settlement systems of financial instruments (CCLV) based on
the former SCL system (used by local brokers to settle their transactions) and the Derivatives Clearing House, systems that meet
the new regulations established by Law. 20,345.
The CCLV is under the oversight of the SVS and it was created to manage the clearing and settlement of financial assets, acting
as a central counterparty for equity and derivative markets and as a clearing house for fixed income, repos and money market
transactions.

SETTLEMENT FLOW CHARTS
FIXED INCOME SETTLEMENT FLOW CHART - ON-EXCHANGE AND OTC
nvestor nt’l broker ocal broker
tock
exchange
ocal
custodian (1)
ocal
custodian
SD
Bolsa de Comercio
de Santiago (BCS)
(DCV - Depósito
Central de Valores)
INTERMEDIARIES
i
Trade Order Trade Order
Trade
Confirmation
Settlement
Instruction
DVP/RVP
Settlement
Instruction
DVP/RVP
Pre - Matching
status
Trade
Confirmation
Settlement
Confirmation
On-exchange steps
• This flow chart does not show any trade or settlement amendments
• Settlement cycle for on exchange is T+2 (no overnight settlement)
• All times stated are Local Time
KEY: TO-Trade Date
VP - Versis Payment
DVP - Delivery vs. Payment
T+1 - Trade Date Plus One Day
FP - Free of Payment
RVP - Receipt vs. Payment
T+2 - Trade Date Plus One Day
DF - Delivery Free
SD - Settlement Date
RF - Receive Free
to
OTC steps to
Trade
Conformation
Trade
Details
Input
transaction in
DVC
Pay or collet the
funds for settlement
Cash account will be
debited or credited and
the Securities will be
received or delivered
Input transaction
in DCV
Trade is
electronically
executed
Invoice or
trade ticket /
Pre-matching
Trade Execution
(TD 9:30-16:00)i l
S
ll
C
1 2 3A B
4
6
10
11
9
8
12
121
5 7 9
4
C
E G I
4 4D
F
J
K
I
H
L
LA
D
Trade Date
(1) Investor places an order through an int’l broker or directly with a local broker.
(2) Int’l broker places an order with a local broker.
(3) Local broker executes the trade at the Exchange.
(4) The Exchange sends the trade details to the depository (DCV) and the trade confirmation to the local broker. The local
broker sends it to the int’l broker and this last one sends it to the investor. In this moment the investor pre-matches the trades
and sends the allocations to the int’l broker and this last one to the local broker.

Trade Date + 1
(5) Investor sends the settlement instruction to its global custodian.
(6) Global custodian sends the settlement instruction to its local custodian.
(7) Local broker sends the invoice with the allocations to the local broker.
(8) Local custodian pre-matches original invoice from the local broker against instruction received from the global custodian.
Trade Date + 2
(9) Local broker and local custodian input transaction in CSD (DCV), through an online link. CSD pre-matches and checks if the
seller has position.
(10) After successful pre-matching, the funds shall be remitted to the selling counterparty via LBTR (The Chilean RTGS system).
(11) Once the payment is done, the seller confirms receipt of funds and the positions are released and registered on the buyer’s
account at the depositary.
(14) Local custodian sends settlement confirmation to global custodian.
Trade Date
(1) Investor places an order through an int’l broker or directly with a local broker.
(2) Int’l broker places an order with a local broker.
(3) Local broker executes the trade at the Exchange.
(4) The Exchange sends the trade details to the depository (DCV) and the trade confirmation to the local broker. The local
broker sends it to the int’l broker and this last one sends it to the investor. In this moment the investor pre-matches the trades
and sends the allocations to the int’l broker and this last one to the local broker.
Trade Date + 1
(5) Investor sends the settlement instruction to its global custodian.
(6) Global custodian sends the settlement instruction to its local custodian.
(7) Local broker sends the invoice with the allocations to the local broker.
(8) Local custodian pre-matches original invoice from the local broker against instruction received from the global custodian.
(9) Local broker and local custodian input transaction in CSD (DCV), through an online link. CSD pre-matches and checks if the
seller has position.

(12) Local custodian sends settlement confirmation to global custodian.
FOR LONG TERM SECURITIES ONLY:
Trade Date
(A) Investor places an order through an International Broker or directly with a Local Broker/Bank.
(B) International Broker places an order with a Local Broker/Bank.
(C) Local broker/Bank executes trade electronically in CSD.
(D) The local broker/Bank sends the trade confirmation to the international broker.
Trade Date + 1
(E) Investor instructs global custodian.
(F) Global custodian instructs the local custodian.
(G) Local broker/bank sends the trade ticket to the local custodian.
(H) Local custodian/bank pre-matches trade details from the local broker against instruction received from the global
custodian.
(I) Local Broker/bank and local custodian input transaction in CSD (DCV), through an online link. CSD pre-matches and checks if
the seller has position.
(J) After successful pre-matching, the funds shall be remitted to the selling counterparty via LBTR (The Chilean RTGS system).
(K) Once the payment is done, the seller confirms receipt of funds and the positions are released and registered on the buyer’s
(L) Local custodian sends settlement confirmation to global custodian.

Equity
Transactions can be regular cash transactions (t+2) or term transaction (t+3 to t+180), that can also be part of a Repo transac-
tion. However, parties can agree in settling in T+1 or T+0.
The payment system (High-Value Netting Clearinghouse, AIPAC) in use for broker-to-investor deals lies in a separate platform
than the transfer of assets (DVP Switch of the DCV). However these systems are highly coordinated and the risk of investors is
significantly low.
Physical free of payment transactions are not allowed, while entry-book free of payment transactions are highly taxes, if they
are not performed under a NCBO scheme.
The vast majority of equity transactions in the country is performed on exchange. The settlement is mostly via entry book (for
assets held in the DCV), or physically, by exception.
Physical Settlement:
Physical settlement is not generally used, since it does not permit to make use of the tax benefits usually granted for on-ex-
change transactions. The physical disposal of an asset takes place through an agreement known as “traspaso”.
DCV Settlement:
Under a Broker-to-investor scheme, each party enters the transaction in the DCV system, and transactions are cleared on a
gross basis along the day,
Pre-match is done in the DCV system each 5 minutes. If it is successful, the transactions are hold in a “compared” status, to veri-
fy if the seller has positions to cover the trade. If yes, the transaction is classified as “verified”. If there are not enough positions
to cover the trade, the transaction us re-verified along the day until 18:30 after which, the transaction is cancelled and has to be
re-entered during the next day.
After the positions are “verified”, they are moved to a “retained” account maintained by DCV.
Once the buyer’s bank sends a conditional payment instruction to the DCV Switch system. If it verifies that there are available
“retained” positions, the payment can take place. The standard for broker-to-investor the payment is done via AIPAC facilities
which confirms payment to the Switch that, in turn, confirms payment to DCV. Upon confirmation of the payment, the DCV chan-

ges the position to “available” status and transfers them to the buyer’s account and the settlement is final and irrevocable.
Partial settlements are not allowed for on-exchange transactions.
Free of payment transactions are managed separate analogous system.
Central Counterparty – Equity
CCLV clears and settles the clearing orders originated by operations in equities, investment funds and subscription options on
equities with settlement condition T+2 traded through the trading systems of the stock exchanges authorized. For this object,
CCLV will provide to the Clearing Members/Indirect Clearing Members the necessary mechanisms to monitor the processes
of inflow, on line calculation of net balances and positions, as well as the acceptance, clearing and settlement of their clearing
orders in Chilean pesos.
Central Counterparty – Fixed Income
CCLV clearsandsettlestheclearingordersoriginatedbyoperations infixed income, moneymarket and stockrepos asa clearing
house.
Most of fixed income transactions are done OTC and are settled in T+0. Transactions done on exchange are generally settled
in T+0 (long-term) or T+0 (short-term). Broker-to-investor transactions are settled using the same facilities than for equity, but
following their particular settlement cycles.
Most of the outstanding debt is dematerialized and held in immobilized form at the DCV,
Central Counterparty - Derivatives
CCLV clearsandsettleseverydaytheclearingordersoriginated byoperations inderivatives withsettlement condition T+1traded
throughthetradingsystemoftheSantiagoExchange.Forthis object, CCLV provides to theClearingMembers/IndirectClearingMem-
bers thenecessarymechanismstomonitortheprocesses of inflow, onlinecalculationof net balances and positions, clearingandse-
ttlementoftheirclearingordersinChileanpesos.CCLVhas onlineacceptanceforderivatives clearingorders and ClearingMembers/
IndirectClearingMembershavetoallocateeachclearingorderduringthesamedayof thetransaction.

Circuit Breakers
Individualsecuritiescircuitbreakersaredesignedtoensurethat all necessaryinformationforpricediscoveryis disclosedtothe
market.CircuitBreakerscanbetriggeredtwoways:
1. Pricefluctuationsonindividualsecuritiesoratthediscretionof theExchangeif thereis causeto believethat thereisa needfor the
“disseminationofessentialfacts,relevanttopricedetermination, not knownbythepublic.”
2. Pricecircuitbreakerwillbetriggeredatthediscretionof theExchange. This decisionhas to bebased onarelevant eventofgene-
ralpricefluctuationinthemarket,of20%upwardsordownwards fromtheopeningpriceforvarious shares inthemarket,or 10%
upwardsordownwardsforChileansharesthatalsotradeADRs.
▶ Trading is halted for 30 minutes while the issuer is contacted to determine if additional information needs to be disclosed.
▶ Trading will resume once the issuer has either released the information, or confirmed that there is no information to
disclose.
▶ The Exchange may renew the initial 30-minute suspension for additional 30-minute periods until such time as the issuer
clarifies the situation.
▶ Once trading resumes following the price circuit breaker, additional price fluctuations will not halt trading unless the
Exchange again considers that there are facts or information that has not been disclosed by the issuer.
▶ Please note that the triggering of the circuit breakers is subject to the discretion of the Exchanges. The price fluctua-
tion limits may be exceeded or trading may not be halted if the exchange feels that sufficient information has been
disclosed to the public.
TheExchangesmayalsodecidetosuspendtradingofasecurityat anytime, evenif thepricefluctuationlimits havenotbeen reached,
andincasetheExchangerequeststhe“disseminationof essential facts, relevant to pricedetermination, not knownbythepublic”.
Tradingwillresumeoncetheissuerhaseitherreleased theinformation, orconfirmed that thereis no informationto disclose.TheEx-
changemayrenewthe30-minutetradingsuspensionforadditional 30-minuteperiods until thetimethat issuerclarifiesthesituation.
Thecircuitbreakermechanismaboveissetforthinaself-regulatoryagreement byall threeexchanges. Thereis no circuitbreaker
triggeredonanyIndex.

3.2 INCOME, CORPORATE ACTIONS & PROXY VOTING
PAYMENT SYSTEMS
All trades on the exchange made by banks can use RTGS or COMBANK. Note that banks have to receive the instructions from its
clients (locals or internationals) and in case of being custodian banks also can make the movements of the positions in DCV. On
the other hand note that the local market operates meanly in CLP, so each trade has associated a FX and each bank has its own
cut-off time.
High-value payments (over CLP 50 million) are cleared sin. LBTR or AIPAC.
LBTR is the RTGS payment system of the Central Bank. AIPAC is the deferred net clearing system run by COMBANC. Both systems
transfer funds electronically. Once the clearing facility conforms the payment to participating banks, these are irrevocable.
Cashier’s checks are not in use for high-value payments, while regular checks may be used for regular purposes. Check clearing is
performed by SINACOFI, a special purpose entity. The check clearing is the responsibility of banks, through the Banking Associa-
tion, and is supervised by the Central Bank.
The CCA (Centro de Compensación Automatizado) is a low-value payments facility privately held by Banco de Chile, Banco de
Crédito e Inversiones and Banco Santander Santiago.CCA does not act as a central counterparty, does not guarantee settlement
and in turn, it compensates through LBTR.
SECURITIES LENDING
Under Res. 36, foreign investors are allowed to participate in securities lending and short selling transactions through a local
broker. Foreign investor should enter into a specific agreement with the local agent.
SHORT SELLING
Short sales are traded and settled through a special facility of the BCS, acting as an agent (not in principal capacity). Transactions
must be registered and collateral provided by local brokers. Short sales can only refer to shares included in “List A” by the BCS.
Collateral:mustamounta125%ofthemarketvalueofthelended securities and arecustodied bytheBCS. TheBCSpublishesa listof
securitiesthatareeligibletobeusedascollateral.Margincalls arecalculated bytheBCSand must befulfilled onanextdaybasis.
The maximum term of a lending transaction is 360 days.

The detail procedure is established in the “Shares transactions manual” (“Manual de Operaciones en Acciones”) of the BCS.
FAILS AND BUY-IN PROCEDURES
Chilean brokers are held responsible for the transactions they execute and have to respond before the CCLV and are obligated
to settle all trades executed on the Exchange. That is why there are no buy-in procedures and almost no fails in the market.
Partial settlement is not allowed.
Fails
A trade cannot be cancelled on a unilateral basis. Therefore a fail procedure will be executed in case that a party fails to provide
either securities or cash. Under the CCLV’s environment, fails are subject to penalties for local brokers who eventually will have to
cover the trade with positions with their own portfolio. The stock exchanges take part of an arbitration committee that resolves
disputes among brokers. However, there is no record of failed transactions that have not been solved under the BCS mechanisms.
Buy-ins
Since Chilean brokers are held responsible for the transactions they execute and are obligated to settle all trades executed on
exchange, there are no buy-in procedures.
TURNAROUNDS
Turnaround trades entail several operational challenges. Therefore they are not a frequent practice, except for fixed-income and
money market transactions.
REGISTRATION OF INSTRUMENTS
Equities are registered, while fixed-income instruments can be registered or held in bearer form (or issued in the name of the in-
vestor’s, depending on the type of instrument). Registration in the name of local custodian is recognized as a nominee concept and
the custodian certifies the final ownership for tax purposes in the case of interest payments.
Equity
There is no central registrar for equities. Each issuing company holds its own shareholder’s register, either directly or through

special providers, such as DCV Registros (A spinoff of the DCV,).
Registration of foreign investors must be done either in the name of the final beneficial owner or in the name of the name of the
local custodian in its nominee capacity.
Fixed Income
Most of the outstanding debt securities is issued on bearer form, therefore there are no registration procedures and physical
possession evidences ownership. However, in the case of securities held in the DCV, this entity maintains records that give faith
of ownership before the issuers. When the fixed income securities are held in the custodian’s name (acting as a nominee), it is the
custodian who must certify ownership before the issuer.
In the case of registered issuances, the registration in DCV registers occurs with the transfer.
Derivatives
Exchange traded futures and options are registered by the exchanges themselves. It is important to note that the market for these
instruments is virtually nonexistent.
ASSET SERVICING
Asset Servicing Considerations
▶ Deals allowing foreign investors to manage more than 50 per cent of voting shares of a company of a strategic sector, or
25 or more per cent of voting shares in the charter capital of companies using the subsoil resources of federal importance.
▶ There are no regulations that could impact a foreign investor`s right as a shareholder with regards to corporate actions.
▶ Rights are tradable, per regulations.
▶ Local law requires physical attendance at shareholder meeting to vote.
▶ Dividends are subject to a 35 percent withholding tax (WHT). WHT on fixed income is 4 percent. Regimes of capital gains
tax (CGT) exemptions can be found in Article 107 and Article 104. Each has its own set of requirements that determine
to what exemptions an investor is entitled.

CORPORATE ACTIONS
Corporate Action Practices
CA Peak Season N/A
Types of CA
Subscription rights issuance, splits, mergers and bond
conversions.
CA Information Sources Santiago Exchange’s official bulletin
CA Announcement Timing Normally RD –15
Pay Date Normally RD + 5
Time Lags N/A
Notice Changes Rare, informed in the same official bulletin
Notice Irregularity Penalties As determined by SVS.
Entitlement Computation Based on traded positions on exchange
Entitlement Position
Based on traded positions on exchange (tax matters are
calculated based on settled positions as of RD).
Claims Policy No predefined policy.
The most common corporate actions are dividends and rights issuances. They are published in the Exchange Bulletin, the official
source for information related to corporate actions. Shareholders are also informed via letters by the issuing companies, who also
must publish their relevant corporate actions in a nationwide newspaper, pursuant to law.

PROXY VOTING
Proxy Practices
Securities with Voting Rights Santiago Exchange official bulletin
Securities without Voting Rights Santiago Exchange official bulletin
AGM Peak Season March and April
Location Santiago and other main cities
Organizations regulating the publication of GMs SVS and exchanges
Notice Publication (by law) Agenda, type (AGM or EGM), place, date and time
Notification Period RD – 15
Meeting Results Publication Qualified cases only
Entitlement Computation Based on settled positions
Entitlement Position On record date (RD)
Method of Voting Physical Attendance
Generalshareholders’meetingscanbeOrdinaryorExtraordinary.By virtueoflaw,atleastoneGeneralOrdinaryMeetingmusttake
place annually, which usually occurs in April. Announcements must be made in a nationwide newspaper at least 15 days before the
meetingtakesplace.MeetingsarealsoannouncedintheExchangeBulletingandindirectmailingsentbytheissuerstoshareholders.

▶ Examination of the company’s situation including the auditor’s report for company financial statements;
▶ Distribution of capital and dividends;
▶ Election or revocation of the board of directors; and
▶ Matters of corporate interest
For EGMs, the company must also publish the proposed agenda for the meeting.
Right to attendance is defined by registered settled positions as of record date. Physical attendace is required. A local agent or
other represented must be duly appointed (special power of attorney is required) and registered with the issuer company.
SharesarenotblockedduringGeneralmeetings.Splitvotingisnotallowed,exceptforboardelections.Localcustodiansaresubject
to special rules intended for nominees acting on their own name on behalf of third parties, defined in the Securities Market Law,
which allows split voting in any matter.
SHAREHOLDER RIGHTS
Foreign investors share the same rights, including voting rights as local investors. There is a special voting procedure for
ADR holders.

4.1 GLOSSARY AND ACRONYMS
4 APPENDICES
AML Anti-Money Laundering
BCCh Central Bank of Chile
BCS Santiago Exchange
BEC Electronic Stock Exchange
CCLV Central Counterparty Clearinghouse
CLP Chilean Pesos
DCV Central Securities Depository
FEM Formal Exchange Market
LBTR High-Value netting Clearinghouse
RUT Chilean Tax ID
SBIF Superintendence of Banks and Financial Institutions
SII Chilean Tax Authority
SVS Superintendence of Securities and Insurances
UAF Financial Analysis Unit
UF Unidad de Fomento, Indexation Unit

4.1 RELEVANT LINKS
SANTIAGO EXCHANGE: HTTP://INTER.BOLSADESANTIAGO.COM/SITIOS/EN/PAGINAS/HOME.ASPX
BCCH: HTTP://WWW.BCENTRAL.CL
INVESTCHILE: HTTP://WWW.INVESTCHILE.GOB.CL/
SVS: HTTP://WWW.SVS.CL

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