Board Resolution No. 064/2015 Approving Modifications to the New Custody Securities Regulation

BOARD RESOLUTION NO. 064/2015 SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES MODIFICATIONS TO THE NEW CUSTODY SECURITIES REGULATION.

HAVING SEEN: Law No. 1670 of the Central Bank of Bolivia, dated October 31, 1995. The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005 of October 21, 2005 and its modifications. The New Custody Securities Regulation, approved by Board Resolution No. 045/2009. Report BCB-GOM-STES-INF-2015-40 of April 23, 2015, from the Monetary Operations Management. Report BCB-GAL-SANO-INF-2015-169 of April 24, 2015, from the Legal Affairs Management.

CONSIDERING: That pursuant to Article 24 of Law No. 1670, all entities of the Public Sector must deposit their funds in fiscal accounts of the Central Bank of Bolivia or in the entity delegated by it.

That Article 29, subsection c) of Law No. 1670, empowers the Central Bank of Bolivia, in its capacity as Financial Agent of the Government, to receive securities in custody from the State, as well as delegate their custody to other financial intermediation entities.

That as established in Article 37 of Law No. 1670, the Issuing Entity shall be the depository of liquid reserves intended to cover the legal reserve and attend the payment system and other operations with the BCB, of financial intermediation entities subject to authorization and control by the Institution for the Regulation of Banks and Financial Entities, being able to delegate the custody of these deposits to the same and other financial entities, according to regulation.

That as determined by Article 38, literal a) of Law No. 1670, the Central Bank of Bolivia may receive demand and time deposits in national and foreign currency from Financial Intermediation Entities.

That the Custody Securities Regulation aims to establish the rules applicable to the receipt and return of securities deposited in the BCB.

That within the framework of the aforementioned, the Board of Directors of the Central Bank of Bolivia, pursuant to Law No. 1670 in its Article 54, subsections a) and o); and to what is provided by the Statute in its Article 11, items 2), and 29), is authorized to issue norms and adopt general decisions that are necessary for it to fulfill the functions, competencies, and powers assigned by the Law.

La Paz, April 28, 2015

Celso Zabala Estrada Reynaldo Yujra Segal Graham Perez Alandia Velarde Vera

R.D. No. 064/2015

That the Monetary Operations Management, through Report BCB-GOM-STES-INF-2015-40, recommends the modification of the Custody Securities Regulation, and requests the Legal Affairs Management to perform the corresponding legal analysis.

That the Legal Affairs Management, through Report BCB-GAL-SANO-INF-2015-169, concludes that the modification of the Custody Securities Regulation in the terms expressed in Report BCB-GOM-STES-INF-2015-40 is legally appropriate, since it is supported by the current legal framework, being the competence of the Board of the Issuing Entity to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided in subsection o) of Article 54 of Law No. 1670 and item 29 of Article 11 of the BCB Statute.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve the New Custody Securities Regulation, in its IV chapters and 32 articles, which in annex, forms part of this Resolution.

Article 2.- This Regulation shall enter into force from May 4, 2015.

Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

ANNEX CUSTODY SECURITIES REGULATION

CHAPTER I OBJECT, TERMS AND DEFINITIONS

Article 1. (Object of the Regulation). This Regulation aims to establish norms for:

1. The receipt, custody, and return of securities from authorized entities of the Public Sector, within the framework of what is established in Title II of Chapter V of Law No. 1670.
2. The receipt and return of securities in custody from Private Financial Intermediation Entities and State Financial Entities or with Majority State Participation, within the framework of what is established in Title II of Chapter VI of Law No. 1670.
3. The receipt and return of securities in custody from the different areas of the BCB.
4. The receipt, custody, and return of machinery or equipment.

Article 2. (Scope of Application). This Regulation shall apply to Public Sector entities, Private Financial Intermediation Entities, State Financial Entities or with Majority State Participation, and BCB areas that require the deposit and/or withdrawal of securities in custody.

Article 3. (Terms and Definitions). The terms and definitions applicable to this Regulation are the following:

1. Deposit or Withdrawal Act, document signed by the applicants as proof of the receipt or return of securities in custody.
2. Vault Environment: It is the closed and protected space of the BCB that has security measures for the safeguarding of goods or values.
3. BCB, Central Bank of Bolivia.
4. Goods and Securities in Custody, values subject to deposit in custody in the BCB that correspond to: Seizures, Historical Documents and Objects, Financial Values, Numismatic Values, and Machinery or Equipment. a) Seizures. Drug samples not exceeding ten grams, money, jewelry, and securities seized, as determined in Law No. 1008. b) Historical Documents and Objects. Manuscripts, acts, publications, and other printed materials with historical value. The Presidential Medal, the Vice-Presidential Medal, the Medal of the President of the Senate, and other jewelry with historical value. c) Financial Values. Promissory notes, bonds, shares, bills, guarantee letters, and any other value regulated by the national legal framework, valid, issued or endorsed in favor of a public sector entity or the financial system. d) Numismatic Values. Specimens and collections of banknotes and coins, Bolivian and foreign medals with numismatic value, matrices, plates, dies, or other objects used in the manufacture of monetary material. e) Machinery or Equipment. Computer equipment, servers, and others.
5. Force Majeure: Internal obstacle attributable to man, unforeseen or inevitable, relative to the conditions themselves in which the obligation had to be fulfilled (civil commotions, strikes, blockades, revolutions, etc.).
6. Authorized Signatures, persons designated by the Applicants to participate in the procedures for receipt and return of securities in custody and to sign the respective documents.
7. Force Majeure: External obstacle, unforeseen or inevitable that originates a force extraneous to man that prevents the fulfillment of the obligation (fires, floods, and other natural disasters).
8. GTES, Treasury Management of the Central Bank of Bolivia.
9. Applicant, public sector entity, financial system entity, or BCB area that requests the deposit or withdrawal of securities in custody.
10. SOMM, Sub-Management of Monetary Material Operations of the Treasury Management of the Central Bank of Bolivia.

CHAPTER II PROCEDURES FOR THE RECEIPT OR RETURN OF SECURITIES IN CUSTODY

Article 4. (Values Subject to Custody Deposits). The BCB will receive deposits of values for custody from the following entities: a) Private Financial Intermediation Entities and State Financial Entities or with Majority State Participation: Financial Values. b) Public Sector Entities: Financial values, Compensation of Contributions Certificates, Presidential Medal, Vice-Presidential Medal, Senate Medal, documents classified as State Secret, and seizures under Law No. 1008 backed by a judicial order. Exceptionally, other historical documents and objects. c) BCB: Financial values, historical documents and objects; numismatic values through the GTES.

Article 5. (Request). The Applicant who requires making custody deposits in the BCB or withdrawing securities in custody, must present to the GTES a request note signed by its highest authority or legal representative authorized for this effect and containing at least the following information: a) Identification of the Applicant b) Description of the values to be custodied or withdrawn c) Description of the container of the values to be custodied. In the case of boxes, specify the dimensions. Time of the deposit, which may be indefinite. d) Name, position, and identity card number of each of the persons designated as authorized signatures of the Applicant, to make the deposit or withdrawal and sign the corresponding Deposit or Withdrawal Act. e) In case of requiring the participation of a Notary Public, specify name and identity card number. It is up to the requesting entity to determine the need to have a notarized act for the deposit or withdrawal of values. f) In case of withdrawal, a copy of the Deposit Act or the deposit code must be attached. g) The deposit or withdrawal of seizures within the framework of Law 1008 must have the respective judicial order.

Article 6. (Operation Scheduling). After the request is accepted, the BCB through the GTES will define and communicate to the Applicant the time and date for the receipt or withdrawal of the Securities in Custody and will designate the SOMM personnel that will participate in the operation, among which must necessarily include the Sub-manager or the Department Head.

Article 7. (Operation). On the agreed date and time of receipt or withdrawal, the SOMM will verify the following requirements: a) The correspondence of the values with the declaration made by the Applicant. In case of withdrawal, it must additionally verify the correspondence with the data registered in the Deposit Act. b) The condition of the value to be custodied as well as its container if applicable, so that its custody does not represent a risk to the environments or personnel of the BCB. c) The correct identification of the Applicant's representatives, including when applicable the Notary Public mentioned in Article 5 of this Regulation. If any of the requirements are not met, the SOMM personnel will suspend the process of receipt or withdrawal of the securities in custody.

Article 8. (Sealed Containers). Except when dealing with financial values, jewelry, and/or deposits of seized drug samples, which must not exceed 10 grams, the Applicant may make the deposit of Securities in Custody in sealed containers. In this case, the SOMM personnel will not verify the content, taking care however that the container is in perfect condition of conservation at the time of its deposit.

Article 9. (Sealed Drawers). They may be used for those documents considered as State Secret, for the historical documents and objects, which will be safeguarded in these drawers in the presence of the depositor.

Article 10. (Deposit or Withdrawal Act). Once the requirements are met, the attendees will sign a Deposit or Withdrawal Act, as appropriate, prepared by the SOMM, which includes at least the following information: a) Date and time of receipt or return b) Description of the Security in Custody. In the case of sealed containers, the expression "Says to Contain" must be recorded c) Identification of the participants. The GTES, through the SOMM, will deliver a copy of the Deposit or Withdrawal Act to the authorized signatures of the Applicant.

Article 11. (Notarized Acts). The Applicant may raise, under its responsibility and cost, Notarized Acts of the Deposit and/or Withdrawal of the Security in Custody, prior communication of this determination to the GTES, as provided in subsection e) of Article 5 of this Regulation.

Article 12. (Physical Custody). The GTES, through the SOMM and in application of its internal procedures, will effect the deposit or withdrawal of the Securities in Custody in the security areas of the BCB. The Applicant's representatives will enter the security areas of the BCB (vaults) only when they must deposit or withdraw securities in custody that are in sealed drawers.

Article 13. (Registration). The GTES, through the SOMM, will effect the registration of the Securities in Custody in the Securities in Custody System (SIVAC).

Article 14. (Commissions and Interests). The BCB will not charge commissions nor pay interests for the receipt of Securities in Custody.

Article 15. (Force Majeure and Fortuitous Event). The BCB will not have the obligation to return or compensate the value received in custody in cases of force majeure or fortuitous event, when there is loss, destruction, obsolescence, deterioration, or others that damage it.

Article 16. (Securities in Custody of Other BCB Areas). The BCB areas that require depositing securities in custody will apply the procedures detailed in this Regulation, corresponding to the highest authority of each Area to make the request through internal communication and accredited the respective official to participate in the delivery or withdrawal of the securities in custody.

Article 17. (Request for Verification of Securities in Custody). Private Financial Intermediation Entities, State Financial Entities or with Majority State Participation, Public Sector Entities, and BCB areas may request the physical verification of their custody deposits, through a note signed by their highest authority in which the name and identity card number of the responsible official are contemplated. The GTES will define and communicate to the applicant, the date, time, and environment where it will be carried out.

Article 18. (Withdrawal of Securities in Custody Requested by the BCB). The BCB may request from the respective depositors, the withdrawal of their securities in custody for reasons of space, security, deterioration, excessive time of safeguarding, or other technically justified reasons.

CHAPTER III MEMORIAL COINS AND MEDALS

Article 19. (Custody). The gold and silver commemorative coins and medals owned by the BCB, including those intended for sale, will be registered under the rubric of securities in custody.

Article 20. (Withdrawal and Deposit of Memorial Coins and Medals). The withdrawal from custody of the gold and silver commemorative coins and medals, for their sale or exhibition, as well as their subsequent deposit after this last activity is carried out, will be effected based on the specific procedures of the SOMM approved by General Management.

CHAPTER IV PROCEDURE FOR THE RECEIPT, CUSTODY, AND RETURN OF MACHINERY OR EQUIPMENT

Article 21. (Custody Deposits of Machinery or Equipment). The BCB may receive machinery or equipment in custody only from Public Sector Entities.

Article 22. (Request). The Public Entity that requires making deposit or withdrawal of machinery or equipment in the BCB, must send to the President of the BCB a request note signed by its highest authority or legal representative authorized for this effect and containing the following information: a) Description of the machinery or equipment to be custodied or withdrawn. b) Specification of the dimensions. c) Time of the deposit. d) Name, position, and identity card number of each of the persons designated as authorized signatures of the Applicant, to make the deposit or withdrawal and sign the corresponding Deposit or Withdrawal Act. e) In case of requiring the participation of a Notary Public, the name and identity card number of the same must be presented. It is the requesting entity that must specify its need to have a notarized act for the deposit or withdrawal of machinery or equipment. f) The value of the machinery or equipment g) Insurance Policy h) In case of withdrawal, a copy of the Deposit Act or the deposit code must be attached.

Article 23. (Analysis and Acceptance of the Deposit Request). The deposit request for machinery or equipment will be derived to the GTES and the Legal Affairs Management (GAL) so that they issue the corresponding technical and legal reports, which will establish both the technical and legal viability to accept the request, which will be formalized through the signing of an Inter-institutional Agreement. The GAL will draft the Inter-institutional Agreement, which, together with the Technical and Legal Reports, will be submitted to the Board for consideration so that this instance, by majority vote of the members present, can authorize the President of the BCB to sign the referred Agreement. The procedure for the withdrawal of the machinery or equipment will be governed by the terms of the Inter-institutional Agreement signed.

Article 24. (Operation Scheduling). After the Inter-institutional Agreement is signed, the Manager of the GTES will agree in writing with the Applicant, the time and date for the receipt of the machinery or equipment in Custody or, in its case, the withdrawal of the same, and will designate the SOMM personnel that will participate in the operation, among which must necessarily include the Sub-manager of Monetary Material Operations or the Head of Department of Monetary Material Operations.

Article 25. (Operation). On the agreed date and time of receipt or withdrawal, the SOMM will verify the following requirements: a) The correspondence of the machinery or equipment with the declaration made by the Applicant. In case of withdrawal, it must additionally verify the correspondence with the data registered in the Deposit Act. b) The condition of the machinery or equipment so that its custody does not represent a risk to the environments or personnel of the BCB. c) The correct identification of the Applicant's representatives, including when applicable the Notary Public mentioned in Article 2 of the present Chapter. If any of the requirements are not met, the SOMM personnel will suspend the process of receipt or withdrawal of the machinery or equipment in custody.

Article 26. (Personnel Entry). The entry of authorized personnel of the requesting Public Entity, into the vault environment, to make custody deposit or withdrawal of machinery or equipment, must be framed within the BCB security protocols.

Article 27. (Environments). The BCB must provide specific places in the vault environment (security areas) for the custody of the machinery or equipment.

Article 28. (Deposit or Withdrawal Act). Once the requirements are met, the attendees will sign a Deposit or Withdrawal Act, as appropriate, prepared by the SOMM, which includes at least the following information: a) Date and time of receipt or return. b) Description of the machinery or equipment in Custody. c) Identification of the participants. The GTES, through the SOMM, will deliver a copy of the Deposit or Withdrawal Act to the persons authorized by the Applicant.

Article 29. (Notarized Acts). The Applicant may raise, under its responsibility and cost, Notarized Acts of the deposit and/or withdrawal of the machinery or equipment in Custody, prior communication of this determination to the GTES, as provided in Article 2 of the present chapter.

Article 30. (Registration). The GTES, through the SOMM, will effect the registration of the deposit or withdrawal of the machinery or equipment in custody in the BCB.

Article 31. (Force Majeure and Fortuitous Event). The BCB will not have the obligation to return or compensate the value received in custody in cases of force majeure or fortuitous event, when there is loss, destruction, obsolescence, deterioration, or others that damage it.

Article 32. (Insurance). The Public Entity that requests the deposit of machinery or equipment in BCB vault environments must accompany the request with an all-risk insurance policy, in which it is specified that it has coverage for "Equipment out of the Insured's control" and whose Annex specifically includes the machinery or equipment that is deposited in custody. Said insurance must remain valid during the time that the machinery or equipment is in the BCB facilities and the Public Entity must send a copy of the policy in each renewal it makes.