Euroclear link with Peru Features, services and benefits 19 July 2017

Agenda Expansion in the LATAM region Creating the ‘right’ conditions Euroclear link with Peru: features, services & benefits

Speakers Fatima Mehladi - Product Manager – Global Capital Markets Fernanda Aspilche Ferro, Product Solutions – Global Capital Markets

Euroclear’s foot print in LATAM Mexico – Feb 2015 First ‘Euroclearable’ Mexican corporate bond (Pemex) Panama – Apr 2014 New link for government bonds Peru – July 2017 First ‘Euroclearable’ Peruvian sovereign bond Brazil – Jan 2011 Link for all Brazilian securities Chile – 2016 & 2017 Moving from pro-rata to record date taxation Recognition of ICSD omnibus account set-up Fully ‘Euroclearable’ sovereign bonds in January and June 2017 Argentina – 2016 & 2017 Enhanced FX services Euroclear part of structural market changes (e.g. DvP settlement) Steady flow of new issuances 2011 2014 2015 2016 2017

Creating the ‘right’ conditions For the buyers Settlement & cost efficiency Omnibus account - Internal settlement with immediate settlement finality Protection of investor’s rights Nominee concept recognized by Peru since November 2015 We facilitate investment in Peru and holding of Peruvian sovereign bonds in a secure & seamless manner Easy access to primary market The primary market further opens and ease the access for international dealers Direct link EB is the registered ‘Nominee’ holder in the books of CAVALI (no intermediary in the chain) Tax Domestic sovereign bonds and financing transactions on those bonds are exempted from tax

Euroclear Link with Peru Features and services Account structure Eligible securities Primary market settlement Secondary market settlement Money transfer Asset servicing Financing

Euroclear link with Peru Account structure - omnibus CAVALI (Registrar) CAVALI (Peruvian CSD) is the registrar appointed by the issuer, the Ministry of Economy and Finance of Peru (MEF)* Euroclear Bank (Nominee account) Euroclear Bank is the issuer CSD appointed by the MEF for some of its future sovereign bonds Euroclear participants and CAVALI will hold the bonds in a regular omnibus account with Euroclear Bank. CAVALI will be holding the bonds on behalf of its local Peruvian clients Euroclear Bank participants (including CAVALI) * CAVALI will also be the issuing and paying agent for the issuer

Euroclear Link with Peru Eligible securities New Peruvian domestic Sovereign bonds to be issued by MEF via Euroclear Bank can settle in Euroclear Bank and CAVALI The new bonds will be denominated in Peruvian Sol (PEN) The new bonds are traded in units in the local market; however, they will be recorded and reported in nominal amount in Euroclear Bank Existing sovereign bonds will continue to settle in CAVALI

Euroclear Link with Peru Primary market settlement Participate in the primary distribution of new Peruvian sovereign bonds using your Euroclear Bank regular account The primary distribution of new bonds will take place in Euroclear Bank. The new bonds will be distributed by the issuing agent (CAVALI) to the primary initial purchaser’s Euroclear Bank accounts Euroclear Bank participants will then be able to purchase the new bonds DvP from the primary dealers, against payment of USD (as per the offering memorandum of the new bond) Settlement of primary market during the real-time process dated closing date - daylight settlement indicator required !

Euroclear Link with Peru Secondary market settlement DvP Settlement can take place against any of the 50 settlement currencies supported by Euroclear Bank. Settlement could also be free of payment if agreed between the two counterparties Settlement can take place during both the batch and the real-time processes Euroclear Bank participants trading with a local counterpart will settle internally in EB against the account of CAVALI (as investor CSD – account 76971) All Euroclear Bank standard instruction formats and deadlines for internal instructions will apply

Euroclear Link with Peru Money Transfer Cash Overdrafts are not allowed How to receive PEN into your Euroclear Bank cash account: You can do a standard foreign exchange instruction via Euroclear Bank You can do a direct deal with Euroclear Bank’s treasury desk You can do a third party Foreign Exchange transaction and transfer the PEN to your Euroclear Bank cash account You can transfer from another Euroclear Bank cash account via a book transfer How to transfer PEN out of your Euroclear Bank cash account: You can do a standard wire transfer via Euroclear Bank You can transfer to another Euroclear Bank cash account via a book transfer

Euroclear Link with Peru Asset Servicing Income – Standard Eurolear Bank income services in terms of processing and reporting Corporate actions - Standard corporate action notifications (DACE notices) keep you informed of upcoming corporate actions affecting your Peruvian domestic sovereign bonds held with Euroclear Bank Tax - Peruvian domestic sovereign bonds held with Euroclear Bank will not be subject to withholding tax

Euroclear Link with Peru Financing Triparty, lending & borrowing Newly issued Peruvian domestic sovereign bonds can be used for financing purposes in EB via Euroclear’s Collateral Highway New Peruvian domestic sovereign bonds will be eligible in our securities lending and borrowing programme

Euroclear Link with Peru Benefits Full Asset Protection Easy plug-and-play solution using your Euroclear Bank regular account Access to local and international counterparties via EB Efficient and cost effective thanks to internal settlement Multi-currency settlement against any of the 50 settlement currencies eligible in Euroclear Bank Standard asset servicing Financing through triparty and lending & borrowing

Contact points at Euroclear Bank Q & A Contact points at Euroclear Bank Fernanda Aspilche Ferro – Fernanda.aspilcheferro@euroclear.com Fatima Mehladi – Fatima.Mehladi@euroclear.com

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