Mexican Settlement Model

Gerardo Gamboa

April,2013

Trading Mechanisms

Exchanges

Price Vendors

Banking Commission

Central Bank

Regulators Financial Participants

Central Bank

InfrastructureFacilitators

Ministry of Finance

Settlement Participants

BIS establishesPayment Systems Principles and

Best Practices

Enhance the Mexican financial

markets

History

1. Model 1:

Real-time gross settlement

2. Model 2:

Netting of funds

3. Model 3:

Netting of securities and funds

Bank for International Settlements DvP Models

$500 USD

Bank A

Bank BBank C

Borrow

100

R9b1k

$500 USD

Model 1 Real-Time Gross Settlement

Liquidityand real-time

Efficiency

Simplicity

Model 1 Real-Time Gross Settlement

Liquidity

and real-time

Efficiency

Simplicity

Model 1

Liquidity

and real-

timeEfficiency

Simplicity

Model 2

Model 2 Netting of Funds

A sells 100 X $500 to CA buys 100 X $500 to B

ABC

R9b1k100

$500 USD

Bank A

Bank C Bank B

Netted

At the end of the settlement cycle

Model 3 Netting of Securities and Funds

Model 1

Liquidity

and real-

timeEfficiency

Simplicity

Model 2

Model 3

Liquidity

and real-

timeEfficiency

Simplicity

Liquidity

and real-time

Efficiency

Simplicity

Model 3 Netting of Securities and Funds

Liquidity

and real-time

Efficiency

Simplicity

Model 1

Liquidity

and real-

timeEfficiency

Simplicity

Model 2

Liquidity

and real-

timeEfficiency

Simplicity

Liquidityand real-

timeEfficiency

Simplicity

Model 3

Model

DALI Model

World-classModel 3 system

Continuoussettlement

Attainorganizationalobjectives

Mexican Model

ISO 15022Indeval Financial Protocol

Match Engine

Securities Management

Funds Operations

Securities Operations

International Operations

Central BankLink

Custody

Safekeeping

Risk Management

Collateral Management

Pre-settlement

Settlement

Clearing

Processes all transactions

!

Settlement System

Pre-settlement Clearing

Settlement

To settle

To clear

Pending

Pend

ing

To s

ettle

Settlement System

Pre-settlement Clearing

Settlement

1,200 $83,000

i

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DvP

Settlement System

Pre- SettlementFoP

& C

ash

Dep

osit

s

Cash

Tra

nsfe

r D

ali

Nett

ing

Com

posi

te t

ransa

ctio

ns

Cash

Deb

its

Settlement

Clearing

Named Accounts

Controlled Accounts

Settlement System

Model 1 Model 3

Real-Time

Efficiency

Configurable pre-settlement module

Objective functions i

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Versatile

Flexible

Highly Efficient

Features Included

Hibrid

270Clearing and settlement process

times each and every business day

67,000times each year

Every settlement cycle being Mission critical

Since the First Day of Dalí

Custody• Number of Issues: 6,706• Value: USD 860 Billion• Custoy value in % of GDP: 95%

Settlement**• Daily average : USD 146.7 Billion• Daily volume: 29,830 Transactions• Daily volumen vs GDP: 4.2 daily

DALÍ-SPEI conection

• Daily Amount of transfers: USD 58 Billion

Settlement & Clearing process• Daily (8:00-16:15hrs): 270 per day• Number of transaction and amount of

the daily fist process:1,400USD 27 Billion

Others• Number of members: 110• Number of messages: 250 000 in and out

Dalí Statistics

USD 250 billion settled daily 52% reduction

USD 130 billionVery conservativeintraday opportunity cost

USD 240 million in savings in just 18 months

Dali Benefits

In just one minute:

22,000 data base records

USD 75 billion settled

10,000 messages sent

Dali Record

Thank you

April, 2013

Mexican Central Securities Depository