CETIP

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(No Transcript)
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OTC Clearing House
OTC Derivatives The Case of Brazil
Marcelo Fleury
September/2008
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Agenda

• CETIP OTC Clearing House
• Derivatives - Domestic Markets
• Derivatives - International Markets
• Conclusion

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CETIP

• CETIP is the Brazilian Central Securities
  Depository for Corporate Securities and OTC
  Derivatives.
• Since its inception in 1986, CETIP has been
  working in a cutting-edge concept
• Centralized Custody
• All settlements are processed in simultaneous,
  irrevocable and final DVP (Delivery Versus
  Payment)
• Settlement in Central Bank Participants Reserve
  Accounts for all trades it processes
• Straight Through Processing STP
• Custody of all assets in dematerialized form
• Self-Regulatory Organization.

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CETIP Figures
Assets under Custody (US Trillion)
As of 07/01/2008
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CETIP Figures

• Main Assets under Custody
• DI-  US 273,0 billion 20.1
• Fund Quotas  - US 263,4 billion 19.4
• CDB (CD)  - US 310,0 billion 22.8
• Swaps - US 157,0 billion 11.6
• Corporate Bonds - US 145,6 billion 10.7
• Others US 208,0 billion 15.3

As of 07/07/2008
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Brazilian Capital Markets
OVERVIEW
Total US 2,550 Trillion
Fonte STN, Bovespa,CETIP, ANBID, CVM 14/02/2008
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Derivatives - Domestic Markets

• Regulated and supervised by the CVM (CNV)
• Legally defined as
• Standardized derivatives exchange-traded -BMF
• Non-standardized (OTC) CETIP and BMF all
  transactions must be registered
• Registration advantages
• Transparency
• Surveillance of the notionals transacted
• Investor Protection

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Derivatives Domestic Markets
EXCHANGE-TRADED X OTC DERIVATIVES - BRAZIL
R Billion
2.500
2.239
2.000
1.500
1.000
503
500
-
2004
2005
2006
2007
2008
1 30/04/2008
SourceCetip / BMF
BMF
OTC (CETIPBMF)
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Derivatives Domestic Markets
OTC DERIVATIVES CETIP X BMF
1 30/04/2008
SourceCetip / BMF
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Derivatives Domestic Markets
OTC Derivatives Growth - CETIP
R 394,41 Billion April / 2008
OTC CETIP Main Instruments
R Billion
400,00
Credit Swaps
350,00
Flexible Options
300,00
NDF
250,00
200,00
150,00
Swaps (mainly IR/FX)
100,00
50,00
-
2002
2003
2004
2005
2006
2007
SourceCetip
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Derivatives Domestic Markets
BENCHMARK INTEREST RATES (SELIC RATE)
January 1999 Foreign Exchange Devaluation
Lulas Second Term
Transition FHC - Lula
Source Banco Central do Brasil
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International Markets
OTC Derivatives Growth - World
US 516,40 Trillion June /2007
USTrillion
US 96,68 Trillion June /2007
SourceBIS
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International Markets
OTC Derivatives Notional Values
US Trillion
Total US 516,40 Trillion
600,00
500,00
400,00
300,00
200,00
100,00
-
June /
June /
June /
2005
2006
2007
Interest Rate Swaps
Unallocated
Foreingn Exchanges Contracts
Credit Default Swap
Equity-Linked Contracts
Commodity Contracts
SourceBIS
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International Markets
OTC Derivatives Gross Market Values
Total US 11,14 Trilhões
US Trilhões
12,00
10,00
8,00
6,00
4,00
2,00
-
Junho /
Junho /
Junho /
2005
2006
2007
Interest Rate Swaps
Foreingn Exchanges Contracts
Unallocated
Equity-Linked Contracts
Credit Default Swap
Commodity Contracts
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OTC Clearing House
Marcelo Fleury, Head of Investor Relations and
Foreign Affairs marcelo.fleury_at_cetip.com.br
September/2008