Chapter II. Membership in the association

 

Article 6 – Membership back »

Central securities depositories, clearing houses and other organizations of the Americas acting professionally as securities depositories or securities clearinghouses, irrespective of what other functions they may perform, and which are recognized as such by the competent authority, shall be entitled to become members of the Association if they meet the requirements established in these Bylaws and they are admitted by the General Assembly.

Moreover, stock exchanges and central banks performing the function of central securities depositories or clearinghouses and which are duly recognized as such by the competent authorities in their respective countries, are also entitled to become members of the Association. They will lose such right, however, at the time when such functions are transferred over to a securities depository or securities clearinghouse.

Notwithstanding the foregoing, banking corporations, regardless of what is their primary line of business and even if they provide securities depository services and/or clearinghouse services, shall not be entitled to become members of the Association.

For the purpose of these Bylaws, the expression “Central Securities Depositories” or, simply, “Securities Depository” and the term “Clearinghouses” shall mean:

1. Those institutions legally incorporated for this purpose and that are recognized as such by the regulatory authorities in each of the countries where they are incorporated; or

2. Companies owning 100% of the common shares of one of the companies described in Point 1 above, and that in addition might be a banking institution, insofar as its primary line of business and operations are those of a central securities depository or clearinghouse.

The Founding Members of the Association are those entities that attended the meeting in Lima, Peru and signed these Bylaws, meaning: Caja de Valores S.A. and Mercado de Valores de Buenos Aires S.A. of Argentina; Companhia Brasileira de Liquidição e Custódia of Brazil; The Canadian Depository for Securities Limited of Canada; Depósito Centralizado de Valores S.A. of Colombia; Central de Valores of Costa Rica; Depósito Central de Valores S.A., Depósito de Valores of Chile; The Depository Trust & Clearing Corporation of the United States of America; Central Nicaragüense de Valores of Nicaragua; Central Latinoamericana de Valores of Panama; CAVALI I.C.L.V. of Peru; and Bolsa de Valores de Montevideo of Uruguay.

The future admission of new entities shall be decided upon by the General Assembly and they shall be entitled to the same rights and obligations as the Founding Members.

Central Securities Depositories and Clearinghouses incorporated in countries outside of the American continent may also be admitted by the General Assembly as Members of the Association, provided that they meet all the requirements of these Bylaws. It is also hereby established that only one third (1/3rd) of the Association’s total membership may be made up of Securities Depositories and/or Clearinghouses incorporated in countries located outside of the Americas.


Article 7 – Admission, Rights and Obligations back »

7.1 Admission back »

7.1.1 Documentation and Information back »

Institutions that wish to apply to become Members of the Association must submit a written request accompanied by the following documents:

• The legal provisions and/or regulations governing their activities in their country of incorporation;

• Certification that they are recognized as legal entities within the countries of legal domicile, through the submission of the relevant document of its legal incorporation;

• Certification that they have received authorization from the competent entities of their countries, to operate as Securities Depositories and/or Clearinghouses, which authorization remains in force as of the date of their application;

• A list of their main Board Members and Executive Officers, including their names and titles; and

• A legal document granting one or more of the officers listed in the Point above, the authority to represent the Securities Depositories and/or Clearinghouses before the Association. Such document must contain an official seal and be legally certified so that it may be legally accepted in Peru.

The Executive Committee has the authority to request that applicants submit any other documentation or information, in addition to that previously listed.

7.1.2 Approval for Admission back »

If the Executive Committee finds that the documentation and information submitted by an applicant are insufficient, it will, through the President, instruct the Secretary to follow-up with the applicant until all the requirements of the Executive Committee are met.

If the Executive Committee finds that all documentation and information requirements have been met by an applicant, it will, through the President, send a communication to all Members of the Association informing them of the said application for membership. Members shall have thirty (30) days from the date of the Chairman’s communication, to submit if they so wish, any duly founded objections to the proposed application.  In this regard:

• If no objections have been presented by the end of the term indicated above the application for membership shall be approved by the Executive Committee and submitted for final approval by the General Assembly; and

• If however, an objection is presented by any Member of the Association within the thirty (30) day period indicated above the Executive Committee shall review it, consult with the objecting Member if it so deems necessary, and determine whether or not the application should be approved by the Executive Committee and submitted for final approval by the next General Assembly. Nevertheless, the Executive Committee reserves the right to approve an application for membership despite any objections expressed by any Member of the Association, subject to final approval by the General Assembly.

Notwithstanding the foregoing, in the event that an applicant makes an application for admission shortly before a General Assembly and there is insufficient time to inform all the Members of the Association as outlined above, the Executive Committee shall be authorized to deal with the matter as indicated in the following paragraph, and then present the application for approval by the General Assembly.

Upon receipt of a report from the Executive Committee on the applicant’s compliance with the requirements listed above and those referred to in Article 6, the admission of a new member shall be decided by the General Assembly, in an open vote, by the majority of Members present or represented therein. With the favorable report of the Executive Committee, an applicant institution may begin to participate in the Association’s activities. However, it shall only become a Member later when the General Assembly agrees to approve its application.

The approval of a new Member by the General Assembly means that the former accepts the provisions of these Bylaws, a copy of which shall be made available to such new Member. Accordingly, once the session of approval within the corresponding General Assembly has come to an end, a new Member shall enjoy all the rights and comply with all the obligations of membership in the Association.

A Member Registry Book shall be kept at the headquarters of the Association and under the responsibility of the Executive Committee, listing each Member institution and containing at least the following information: name of the entity, nature of the business, address, date of admission, and a list of the names of the persons with power to duly represent such entity before the Association.

7.2 Rights and Obligations back »

The following are the rights of the Members of the Association:

• Attend General Assembly meetings and vote;

• Request the establishment of the committees referred to in Point 9 of Article 2 of these Bylaws; and

• Elect and be elected for positions within the Executive Committee.

The following are the obligations of the Members of the Association:

• Submit the documentation and information requested by the Executive Committee, as established in these Bylaws;

• Abide by the Bylaws of the Association, amendments thereof, as well as resolutions of the General Assembly;

• Pay the membership fees referred to in Points 1 and 2 of Article 18 of these Bylaws, or a proportion thereof corresponding to the balance of the current year;

• Keep the Secretary fully informed of any changes in their circumstances or in their information kept in the Member Registry Book; and

• Contribute to the fulfillment of the objectives of the Association.

Article 8 – Suspension and Loss of Membership back »

8.1 Suspension of Membership back »

Membership in the Association may be suspended by the General Assembly with prior review by the Executive Committee and in cases involving any of the following circumstances:

1. When an entity commits acts or actions which affect or compromise the interests of the Association; and

2. When an entity does not pay the ordinary or extraordinary membership fees set by the General Assembly, within the sixty (60) day period referred to in Points 1 and 2 of Article 18 of these Bylaws.

The suspension of a Member shall not extend beyond the date of the following General Assembly, at which time a decision shall made on whether to lift or maintain the suspension or eventually exclude the Member institution, depending on whether it has remedied or maintained the circumstances which led  its suspension.

8.2 Loss of Membership back »

Membership in the Association may be lost for the following reasons:

• A written resignation addressed to the President of the Association. The resignation will take effect thirty (30) days after its receipt or upon expiry of the term set forth in the resignation. Such entity shall not be subject to or linked to any action taken by the Association, its General Assembly or its Executive Committee after its resignation takes effect.

• A resolution of the General Assembly for exclusion from the Association, with prior review by the Executive Committee. A request for exclusion may be presented by any Member institution and it shall proceed when:

• The respective entity commits acts or actions that affect or seriously compromise the interests of the Association, as determined by the General Assembly according to its powers under Point 6 of the following Article 9;

• The respective entity does not pay the ordinary or extraordinary membership fees set by the General Assembly, within the sixty (60) day period referred to in Points 1 and 2 of Article 18, after having been specifically notified to do so;

• The respective entity is dissolved and liquidated; or

• The respective entity ceases to operate as a Securities Depository and/or a Clearinghouse or such functions were transferred to another securities depository or clearinghouse.

In any of the cases involving a loss of membership in the Association as previously listed, the respective entity in question shall pay the Association the ordinary membership fees or a portion thereof, corresponding to the year in which such loss of membership takes effect.  In the appropriate cases, the Executive Committee shall consider the possible reimbursement of the proportional part of the last payment of membership fees made by the entity affected.  On the other hand, the respective entity shall not have any rights whatsoever over the assets of the Association.

It is hereby established that before a decision is made to suspend or exclude a Member as outlined in this Article, an opportunity shall always be given to the relevant institution to defend itself as it deems necessary, according to a process agreed upon by the current Executive Committee, and duly communicated to the Member institutions.

Once a decision to suspend or exclude has been adopted as stated in the previous paragraphs, the appropriate resolution shall be communicated to the respective Member, by the President, in a letter mailed to its address or in an e-mail.