Resolution 045/2009 Approving the New Custody of Securities Regulation

BOARD RESOLUTION NO. 045/2009
SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES NEW REGULATION ON CUSTODY OF SECURITIES.

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 Regulation on Custody of Securities, approved by Board Resolution No. 23/2006 of March 7, 2006.
The Report STES No. 039/2009 of March 17, 2009, from the Monetary Operations Management.
The Report SANO No. 093/2009 of March 31, 2009, 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, authorizes 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 to delegate their custody to other financial intermediation entities.

That as established by Article 37 of Law No. 1670, the Issuing Entity shall be the depository of the liquid reserves intended to cover the legal reserve requirement and to attend to the payment system and other operations with the BCB, of the financial intermediation entities subject to authorization and control by the Institution for the Regulation of Banks and Financial Entities, and may 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 the Financial Intermediation Entities.

That the Regulation on Custody of Securities 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 pursuant to 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.

That the Monetary Operations Management in its Report STES No. 039/2009 recommends the modification and updating of the Regulation on Custody of Securities.

That the Legal Affairs Management in its Report SANO No. 93/2009 states that pursuant to Article 54, literal a) and o) and in accordance with the Statute of the Central Bank of Bolivia in its Article 11, item 2), and 29), it corresponds to the Board to consider the modification of the aforementioned Regulation.

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

Article 1.- Approve the new Regulation on Custody of Securities, which as an annex forms an integral part of this Resolution.

Article 2.- This Regulation shall enter into force on May 1, 2009; from that date, Board Resolution No. 23/2006 of March 7, 2006, is hereby repealed.

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

La Paz, April 14, 2009

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Gabriel Loza Tellería

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Gustavo Blacutt Alcalá Hugo Dorado Araníbar

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Rolando Marín Ibáñez Ernesto Yáñez Aguilar Rafael Boyán Téllez

ANNEX
REGULATION ON CUSTODY OF SECURITIES

CHAPTER I
OBJECT, TERMS AND DEFINITIONS

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

1. The receipt and return of securities in custody of authorized entities of the Public Sector, within the framework established in Title II of Chapter V of Law No. 1670.
2. The receipt and return of securities in custody of banks and financial intermediation entities within the framework established in Title II of Chapter VI of Law No. 1670.
3. The receipt and return of securities in custody of the different areas of the BCB.

Article 2. (Scope of Application). This Regulation shall apply to entities of the Public Sector, financial entities, and areas of the BCB 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 as follows:

1. Deposit or Withdrawal Act, document signed by the applicants as proof of the receipt or return of the securities in custody.
2. BCB, Central Bank of Bolivia.
3. Applicant, entity of the public sector, the financial system, or area of the BCB that requests the deposit or withdrawal of securities in custody.
4. Authorized Signatories, persons designated by the Applicants to participate in the procedures for receipt and return of securities in custody and to sign the respective documents.
5. GOM, Monetary Operations Management.
6. STES, Treasury Sub-Management.
7. Securities in Custody, securities subject to deposit in custody at the BCB that correspond to: Seizures, Documents and Historical Objects, Financial Securities, and Numismatic Securities.
   a) Seizures. Drug samples not exceeding ten grams, money, jewelry, and securities seized, as determined in Law No. 1008. b) Documents and Historical Objects. Manuscripts, acts, publications, and other prints 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 Securities. Promissory notes, bonds, shares, bills, guarantee certificates, and any other value regulated by the national legal order, valid, issued or endorsed in favor of a public sector entity or the financial system. d) Numismatic Securities. 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.

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

Article 4. (Securities Subject to Custody Deposits). The BCB will receive deposits of securities for custody from the following entities:
a) Financial Entities: Financial Securities. b) Public Sector Entities: Financial Securities, Compensation of Contributions Certificates, Presidential Medal, Vice-Presidential Medal, Senate Medal, documents classified as state secrets, and seizures under Law No. 1008 backed by a judicial order. Exceptionally, other documents and historical objects. c) BCB: Financial Securities, documents and historical objects; numismatic securities through the GOM.

Article 5. (Application). The Applicant requiring to make deposits in custody at the BCB or withdraw securities in custody must present a request note signed by its highest authority or legal representative authorized for this purpose to the GOM, containing at least the following information:
a) Identification of the Applicant b) Description of the securities to be custodied or withdrawn c) Description of the container of the securities 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 signatories 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 securities. 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. (Scheduling of the Operation). After the application is accepted, the BCB through the GOM 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 STES personnel who 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 for receipt or withdrawal, the STES will verify the following requirements:
a) The correspondence of the securities 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 security to be custodied as well as its container, if applicable, so that its custody does not represent a risk to the BCB environments or personnel. 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 STES personnel will suspend the process of receipt or withdrawal of the securities in custody.

Article 8. (Sealed Containers). Unless it concerns financial securities, 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 a sealed container. In this case, the STES personnel will not verify the content, however ensuring that the container is in perfect condition of conservation at the time of its deposit.

Article 9. (Sealed Drawers). These may be used for documents considered as state secrets, for documents and historical objects, which will be guarded in these drawers in the presence of the depositor.

Article 10. (Deposit or Withdrawal Act). Once the requirements are met, the assistants will sign a Deposit or Withdrawal Act, as appropriate, prepared by the STES, which includes at least the following information:
a) Date and time of the 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 GOM, through the STES, will deliver a copy of the Deposit or Withdrawal Act to the authorized signatories 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 GOM, as provided in subsection e) of Article 5 of this Regulation.

Article 12. (Physical Custody). The GOM, through the STES and in application of its internal procedures, will carry out 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 GOM, through the STES, will register the Securities in Custody in the Securities in Custody System (SIVAC).

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

Article 15. (Force Majeure and Fortuitous Event). The BCB will not have the obligation to restore 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 accredit the respective official to participate in the delivery or withdrawal of the securities in custody.

Article 17. (Request for Verification of Securities in Custody). Financial entities and Public Sector entities and BCB areas may request the physical verification of their deposits in custody, through a note signed by their highest authority in which the name and identity card number of the responsible official are included. The GOM 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 due to space, security, deterioration, excessive time of storage, or other technically justified reasons.

CHAPTER III
COMMEMORATIVE 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 item of securities in custody.

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