TAMPA CITIFORUM DECEVAL March, 2016

Transcription

1 TAMPA CITIFORUM DECEVAL 2016 March, 2016

2 Topics 1. Deceval Overview 2. BVC DECEVAL Integration Process 3. CCP Developments 4. Main Market Challenges Deceval CORE System Project 6. The Colombia Securities Market View Deceval

3 1. Deceval Overview 3

4 We are to lead the transformation and development of the domestic market of financial assets and its global competitiveness Market Architecture Market Development Strategy with all market participants New FMIs Market Model (FMIs Integration and synergies) International Strategy for global competitiveness Competitiveness (Efficiency/Excellence) Process automation, connectivity and interoperability Redesign process model in the value chain Alignment of regulatory framework with international standards IT Architecture model Value Added Strengthening the comprehensive management of customer needs Comprehensive sales and service model Creating utilities ( shared services / risk management ) Deepening market and income diversification

5 Deceval - Overview DECEVAL SERVICES EVOLUTION USD billions $ % Securities market % Securities under custody % Equity issues value % Free of payment transactions value % DVP Operations value % Deceval total Operations value % VALUE TRADED EVOLUTION IN THE COLOMBIAN MARKET Main market behavior in USD billions $ % EQUITY % SEN (Electronic Trading System at the Central Bank ) (26.2) -5.5% MEC TOTAL (The Colombian Electronic Market ) % FIXED INCOME-PRIVATE DEBT % TREASURY BONDS % DECEVAL FINANCIAL EVOLUTION Main financial numbers Millions $ % EBITDA % Operating revenues % Net profit % Operating profit % Operating expenses % Shareholders Equity % Assets %

6 Mission: Vision: To contribute to the development of the Colombian capital market, and to facilitate the growth of the markets in which we interact. To efficiently manage the securities and other financial instruments life cycle in the financial market. Banks: 66.17% Shareholders Colombian Stock Exchange BVC: 22.98% Trust Companies: 6.64% Financial Corp.: 3.67% Brokers: 0.25% Others: 0.29% Deceval - Overview Participants: Main Statistics Issuers and 185 Depositors. Assets Under Custody Value on deposit at December, 2016 USD Billion 96.6% dematerialized Total Number of Transactions (both sides): 2.9 Million Value Transferred : USD Billion

7 Main Achievements 2016 Investor Protection: Custodian model for mutual funds fully operational. A successful process was developed to migrate all portfolios from administrators to custodians. Deceval system performed with excellent results at the industry change. Customer Service: During 2016 we continued to improve our customer service to participants. We enhanced Deceval s approach to customer satisfaction. An independent review was executed under Customer Index Value Methodology. We obtained 83 points, which is a positive and relevant performance in client service. Anti-Fraud Enforcement Initiatives: An annual auditing and review program was performed within The risk level is within the expected results Under control. Optimize High-Volume Transaction Processing: Deceval has implemented into operation a high-volume reinvestments processing, as an added value service of Certificates of Deposit (CD) in a dematerialized form for financial institutions and others. An important market share of 76% has been achieved. ISO 27001: Deceval worked to maintain its ISO Certification for Information Security. We were awarded our certificate for all business processes in December 2017 ISO 9001: Deceval was awarded ISO certification for all Deceval strategic and key processes. Production to Contingency Automation: Important results were achieved in Contingency Automation and Testing. RTO was reduced importantly. Time to recover was set at an average of 40 minutes. Last recovery time objective under the controlled test performed in March 2017 was 31 minutes. We performed our operations as expected from the Contingency site for two weeks. Security Platform Update: Deceval invested in a major change in our security platform. We implemented a major firewall update, and new tools were put in to production: Data Loss Prevention, correlation event tools. An important improvement in SOC surveillance was introduced at the end of

8 Main Challenges 2017 New Market Architecture BVC and Deceval Integration: As a result of important work by the BVC and Deceval Integration Committee established by the Board of Directors of the two institutions, under the MOU signed in February 2016, the two companies are working to formalize the integration process. A formula was defined by Legal Consultants to complete the integration of FMIs within the Colombian Securities Market. BVC shareholders will decide in Q at their Ordinary General Meeting regarding a new equity issue necessary to acquire the shares of Deceval. The process is being conducted to be completed in the coming months. A very important decision process to exchange shares has been taken in relation to Deceval Shareholders. CCP for the Equity Market: The project to implement a CCP for the Colombia s equity market continues to develop. The project has taken longer than expected due to changes in the industry processes to support the CCP. In Q2 equity repo transactions will be launched, and then at the end Q1-2018, the cash equity and securities lending transactions will be implemented. STP: We continue to strengthen our service offering to our participants. New information services to improve STP were developed and implemented in Approximately 40 process automations were executed in Deceval systems to support increased efficiency and cost reduction at Deceval, with positive market impacts. Paperless Invoice Post Negotiation Services: Deceval is fully committed to a paperless invoicing service to issuers and the leading banks and finance brokerage specialists in factoring and invoice discounting, in order to provide in the near future a tailor-made post negotiation service, offering greater security, lower cost and greater efficiency to the market without the additional costs of printing and posting by mail. The project is ongoing awaiting for new regulation to be issued. Strategic alliances are an important part of the development. Dematerialized Promissory Notes Issuance : The product has been improved substantially. New required business processes were included in the product offering: Service developments, digital signature portal, high-volume transactions settling, security enhancements to respond to client needs, as well as an important cycle transformation. Deceval is running operations to support the banking Industry in a 7 seven day a week operating environment with 15 hours per day service. Promissory notes are being created at the client s location (Commercial credits Credit cards issuance). New Core Systems: Deceval launched an international RFP for Core Systems replacement. We reached a decision on TATA s - TCS solution to be the new Core System. We will initiate development/implementation in Q At this time we are working in the agreement phase. 8

9 Colombia s Securities Market Main Challenges 2017 CCP for monetary transactions: Repos, sell/buy back, securities lending. Strengthening coverage for institutional transactions and retail investors. Repo transactions to be introduced Q CCP novation for Monetary Transactions was implemented in 2015 and early Important market size has been obtained FMIs market reorganization: New market structure to capture long term synergies and improve competitiveness Strengthening market competitiveness and eligibility - Market rating and eligibility Respond to International Standards: Counterparty and liquidity risk management Adoption of a Warranty fund in the CCP. Retail Investor trust recovery Volume and transaction recovery: New issues, issuers and product development Equity CCP for the Colombian market - Launch in the Repo Market Mutual Funds - Expected developments New product offering 9

10 Colombia s Macroeconomic Main Challenges 2017 Fiscal deficit reduction: Goal 3.3 % of GDP Current account deficit : 3.5% of GDP Colombia s GDP growth: > 2.0% Inflation rate perspective: Between 3.7% and 4.1%. Income and production exports diversification The Oil prices will recover and the production will stabilize, as a result of the cut-off agreement of OPEC member countries. Infrastructure projects development will be the main force for growth in the next years. 4G projects and other public infrastructure projects will demand USD 3.3 Billion in The tax reform was successful in substituting the taxes that were lost as a consequence of lower oil revenues. Stable exchange rate. Unemployment rate forecast : 9.3% 10

11 2. BVC Deceval Integration Initiative 11

12 12 Transaction: Corporate Integration DECEVAL - BVC Structure: Contribution of Shares Current Structure Step 1: Deceval shareholders contribute their shares to BVC Step 2: BVC issues shares in favor of Deceval shareholders Final Structure Shareholders Shareholders Shareholders Shareholders Shareholders Shareholders Shareholders 77.02% 7.02% 100% 77,02% * 22.98% 22.98% 22.98% # of shares BVC 18,672,822,217 Deceval # of shares BVC 110,763 Other Shareholders 371,274 Total 482,037 Ratio x = New Shares 12,437,679,000 BVC # of shares % Current Shares 18,672,822,217 60% New shares 12,437,679,000 40% * If and only DECEVAL if all of Deceval s shareholders 482,037 accept the transaction Considerations: BVC and Deceval are market infrastructure providers and are therefore subject to inspection and surveillance from the Financial Superintendence of Colombia Deceval must have exclusive corporate purpose in the terms of Law 27 of 1990 No one may be the ultimate beneficial owner of more than 10% of the BVC s outstanding shares Recommended structure by the legal advisors: Brigard & Urrutia Total 31,110,501, %

13 13 Transaction Objectives Integration of two Leaders of the Colombia Capital Market Industry Generate efficiencies in the value chain of the Colombian capital markets to reduce costs and enhance the service offering Strengthen the position, soundness and competitiveness of DECEVAL and BVC at the regional and international level. Improve the cost-benefit ratio for market participants Optimize value chain processes / maximize efficiencies Expand product offering Generate synergies Create value for shareholders and other stakeholders

14 14 Merits of the Transaction Benefits for all Market Participants 1. Unified strategy for the development of capital markets 2. Organization and modernization of the market infrastructure 3. Better cost-benefit ratio for market participants 4. Competitiveness at the global level A flagship entity, playing a leading role in the promotion and development of markets: regulatory proactivity An ally to our clients in the transformation and growth of their businesses: appropriation of new technologies and deployment of best practices Close to its stakeholders: meeting the stakeholders needs in the markets where it participates To promote the market s volume growth: generate scale and impact the development of the country To making the Colombian market a regional and global benchmark Simplify and generate efficiencies: eliminating infrastructure duplications Automate and modernize industry processes: incorporate STP processing, high volume capacity, low latency Insert Colombia into the global market: providing local and international interoperability Control risks by applying international standards: ensuring a transparent, reliable and secure market Generate greater confidence through more information and transparency Reduce the total cost of operating in the market Generate economies of scale for our market participants: technology, communications, information, market access Consolidate a single access point to the market: "One Stop Shop Constantly improve service provision Create an eligible market for international investment: meeting standards and best practices Ensure an environment of regulation and supervision that favors the growth and development of the market Become a real financing alternative for the country's companies Diversify and innovate in the generation of products and services: offer a value proposition that responds to our customers needs in a timely way Be a reference in and promote the adoption of sustainability practices - ESG

15 Vertical Integration 15 International Experience Vertically Integrated Exchanges Vertical Integration is the Best Way to Compete Efficiently in a Globalized Environment Value Chain Latam Europe Asia Trading Clearing Settlement Custody

16 16 Exchange Ratio Valuation and Fairness Opinion Total Equity Value Total Equity Value 100% 14.5% Individual 100% 51% 50% 50% 100% 22.98% 32.6% 34.3% 50% Exchange Ratio: 1 Deceval Share = 60 / 40 33,500 BVC Shares The fairness opinion confirms that the terms of exchange ratio are reasonable Valuation: Inverlink Fairness opinion: BNP Paribas Valuation methodology used: discounted free cash flow, previous transactions and sum of the parts

17 17 Steps to Follow Proposed Timeline and Approval Phases With the approval of both Meetings of Shareholders, the closing of the Transaction is subject to the regulatory approvals from SFC and SIC March 24/28 T1 + N1 T2 + N2 T3 + N3 T4 T4 + N4 N1: Days T1 T2 N2: SFC Time T3 N3: SFC and SIC Time N4: Days T5 Shareholders Meetings Regulatory Procedures Execution of Master Agreement Regulatory Review SFC and SIC Transaction Closing DECEVAL Extraordinary Meeting (March 24) Approval of corporate bylaws amendment BVC Ordinary Meeting of Shareholders (March 28) Approvals: Transaction Corporate bylaws amendment Shares issuance Emission of the Issuance Rules by BVC s Board of Directors Formal filling of the Issuance Rules before the SFC Approval of the Issuance Rules by the SFC Execution of the master agreement Launch of private offering of shares by BVC Acceptance by Deceval s shareholders Approval from SFC of the acquisition made by BVC of the shares contributed by the current shareholders of DECEVAL Subscription of shares Registration in BVC s shareholder ledger Registration in the Cámara de Comercio (Chamber of Commerce) Preemptive rights waiver SFC: Financial Superintendence of Colombia (financial supervisor) SIC: Superintendence of Industry and Commerce (antitrust authority) Expected closing : 3Q17

18 3. CCP Developments 18

19 Overview of Cleared markets Market Participants Trading BVC Colombian Stock Exchange SET ICAP TRADITION (OTC) DERIVEX BanREP BVC/OTC Secundario IBR SEN MEC BVC Colombian Stock Exchange SWAPS (OTC) Exchange Trade Derivatives NDF FX FORWARD Energy Derivatives OIS OIS (OTC) BSB/SBB Goverment Bonds Equity: Cash Lending 1Q 2017* Sec Lending 1Q 2018* Cash market 1Q 2018* IRS -4Q 2017 OIS- 4Q 2017 CCS- 2Q 2018 (OTC) Clearing Settlement DECEVAL Central Bank (Cash Leg) DCV (Securities Leg) * Depending on regulatory approvals 19

20 Overview of cleared products Equity Options Feb Dic BSB/SBB SEN Jun IBR Future Ene OIS OTC Ene BSB/SBB MEC Non Delivery Government Bonds Futures Nov OIS USD/COP Future Delivery Equity Futures IBR Future Mar May, 2013 Launching of the CCP Middle term Goverment Bond Future Sept, 2008 Dic, 2008 Middle term Goverment Bond Future Ago, 2009 Mar, 2010 NDF FXFW USD/ COP Abr, 2010 Futuro sobre la acción de Ecopetrol y Preferencial de Bancolombia Mar, 2011 Oct, 2010 Energy Futures Jun, 2012 Jul, 2012 Oct, 2011 Mini Energy Futures 20 Delivery Equity Futures Inflation Future Non Delivery Equity Futures Source: CRCC

21 Market figures Source: CRCC

22 Risk Management : Following EMIR Standards CCP Default Waterfall Clearing Member Initial Margin Extraordinary/Individual Collateral Initial Margin 99.5% confidence interval Defaulting Clearing Member default fund contribution Tranche of CCP s capital Default Fund Default Fund contributions of surviving Clearing Members 99,5% Confidence Interval Assessment/unfunded default fund contributions Additional CCP capital tranche 22

23 4. Market Challenges

24 Macroeconomic Fundamentals Colombia investment grade sustainability Infrastructure financing Ports, highways, airports, others 4G projects Increase economic growth > 2.5% Fiscal Deficit < 3.5% Export diversification initiatives Unemployment rate reduction < 9.3% Capital Markets Capital Markets Increase issuers, market liquidity and volume trading Formalization of BVC DECEVAL Integration Initiative A consolidated strategic view of the Market Strategy: Capital Market Competitiveness Infrastructure Project financing Core systems Update for all FMI in the value chain Increase STP and efficiency 24

25 5. Deceval Core Systems Change 25

26 The System : TCS Solution 26

27 The Future : TCS Implementation for Q : Q

28 Project Timeline : Initiation Q

29 Project Deliverables 29

30 6. The Colombian Securities Market View 2016 Deceval

31 The Colombian Securities Market by Security Type The Colombian Securities Market by Security Type USD Billions Securities Type December 2015 December /2016 Market % Market % Value Variation TREASURY BONDS - TES (1) * % % % COLOMBIA EXTERNAL DEBT % % % EQUITY % % % CERTIFICATES OF DEPOSIT % % % CORPORATE AND FINANCIAL BONDS % % % OTHER GOVERNMENT DEBT DCV* 0.4 0% 0.5 0% % PENSION BONDS 0.6 0% 0.6 0% % MORTGAGE BACKED SECURITIES 1.0 0% 1.0 0% % OTHER SECURITIES 3.6 1% 4.4 2% % FINAGRO BONDS* 2.2 1% 2.6 1% % CONVERTIBLE BONDS - 0% - 0% % TAX REIMBURSEMENT SECURITIES- TI 0.2 0% 0.8 0% % *USD billions TOTAL % % % (1) Includes TES Clase B, Tes Ley 546 y TRD : Statistics-DCV-Banco de la República-Deceval-Bolsa de Valores de Colombia Sources * Banco de la República ** Bolsa de Valores de Colombia *** Banco de la República Deceval % 31

32 The Colombian Capital Market Evolution by Securities Type

33 Total Assets In Custody in the Colombian Depositories 33

34 USD Billions Volume Traded at The Colombian Electronic Market at BVC Volume Traded at The Colombian Electronic Market ,200 1, Fixed Income - Private Debt Treasury Bonds Total , Source : BVC - The Colombia Stock Exchange, The Financial Superintendence 34

35 USD Billions Equity Volume Traded in Colombia Equity Volume Traded at BVC Volumen Traded Source: The Colombia Financial Superintendence 35

36 USD Billions Volume Traded at SEN Central Bank Volume Traded at the Electronic Trading System at the Central Bank - "SEN" $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $ $ Volume Traded Source: The Colombia Financial Superintendence - Banco de la República

37 Equity Issues

38 7. Deceval Main Operational, financial and Market Figures 38

39 Deceval 2016 Figures DECEVAL SERVICES EVOLUTION USD BILLIONS Service Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec /2016 Assets in Custody % Market Share 37.6% 45.0% 44.9% 46.8% 48.8% 54.2% 61.1% 60.3% 58.6% Dematerialized Assets (Jumbo Certificated) % Administration Services Entitlements Processing % Free of Payment Transactions Number of Operations (One side) 1,987,102 1,570,342 1,941,737 2,657,325 2,005,964 1,231,647 1,298,805 1,216,500 1,134, % Value Transferred % Deliver Vs Payment Number of Operations (One side) 221, , , , , , , , , % Value Transferred % Source: Deceval 39

40 Assets Under Custody SECURITES UNDER CUSTODY BY INSTRUMENT TYPE USD Billions December 2015 December 2016 December Securities Value in Value in Variation % % Value Variation Custody Custody % TREASURY BONDS - TES (1) % % % COLOMBIA EXTERNAL DEBT % % % EQUITY % % % CERTIFICATES OF DEPOSIT % % % CORPORATE AND FINANCIAL BONDS % % % PENSION BONDS % % % MORTGAGE BACKED SECURITIES % % % OTHER SECURITIES % % % CONVERTIBLE BONDS - 0.0% - 0.0% % NOT MORTGAGE BACKED SECURITIES - 0.0% % % TAX RETURN SECURITIES - TIDIS % % % TOTAL % % % (1) Includes TES clase B, Tes ley 546 y TRD 40

41 Dematerialization Jumbo Certificated and Book-Entry-Only Form Securities DEMATERIALIZED - JUMBO SECURITIES EVOLUTION USD Billions Securities Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Variation USD Dec 16 / 15 Variation % Dec 16 - Dec 15 EQUITY % CERTIFICATES OF DEPOSIT % CORPORATE AND FINANCIAL BONDS % MORTGAGE BACKED SECURITIES % INTERNAL PUBLIC DEBT BONDS % SECURITIZATIONS % PENSION BONDS % OTHERS % COMMERCIAL PAPERS SECURITIES TAX REIMBURSEMENT SECURITIES % NOT MORTGAGE BACKED SECURITIES CONVERTIBLE BONDS TOTAL % 41

42 USD Millions USD Millions * 2015* 2016 USD Millions Deceval Financial Evolution Shareholders Equity to Net Income * 2015* 2016 Net Income 5,4 6,3 7,7 9,4 10,8 11,8 12,8 15,6 13,0 10,7 6,8 8,0 Shareholders Equity 20,0 22,4 27,4 29,9 33,4 36,7 34,6 39,1 34,8 32,3 22,9 27, Main Financial Figures * 2015* * 2015* 2016 Net Income 5,4 6,3 7,7 9,4 10,8 11,8 12,8 15,6 13,0 10,7 6,8 8,0 Shareholders Equity 20,0 22,4 27,4 29,9 33,4 36,7 34,6 39,1 34,8 32,3 22,9 27,0 Assets 24,3 27,4 34,3 37,9 40,8 46,5 46,0 52,2 47,4 40,0 28,8 34,7 Deceval Income Evolution * 2015* 2016 Net Income 5,4 6,3 7,7 9,4 10,8 11,8 12,8 15,6 13,0 10,7 6,8 8,0 Operating profit 6,9 8,6 10,5 12,0 12,5 16,7 16,9 22,2 19,7 15,5 10,6 12,5 Operating revenues 13,0 15,5 19,6 21,8 25,4 30,7 32,3 40,7 37,5 29,2 21,5 24,3 42

43 Deceval s Financial Ratios to IOSCO BIS Principles

44 7. Deceval Risk Management Practices and Business Contingency Tests 44

45 OUTSTANDING TOPICS: Consolidated Risk Profile 2017 Operational Risk & Non-operational Risk (Emergent) Integrated Risk (Operational and Non-Operational). Conversion to 350 integrated risk of 297 risks. Consolidated Risk Profile is 4.41 (residual level risk, appropriate Low ). Non-operational Risk: financial, legal, reputational, industry, strategic and compliance. EXPLANATION of the RISK PROFILE: CATEGORY TOTAL HIGH RISK VERY HIGH RISK CLASSIFICATION (OPERATIONAL + NON OPERATIONAL) NON-OPERATIONAL OPERATIONAL (fraud risk included) NON-OPERATIONAL RISK GROUP COMPLIANCE LEGAL FINANCIAL REPUTATIONAL CYBER SECURITY STRATEGIC

46 OPERATIONAL RISK PROFILE (risk of fraud included) JUNE 2016 DECEMBER 2016 TOTAL VERY HIGH RISKS TOTAL HIGH RISKS TOTAL MEDIUM RISKS TOTAL LOW RISKS TOTAL MARCH 2017 RATING

47 CYBER RISKS: Guidance on Cyber Resilience for Financial Market Infrastructures - IOSCO (June 2016): - Learning and Evolving: Culture of cyber risk awareness whereby its resilience posture, at every level, is regularly and frequently re-evaluated. - Situational awareness: Understanding of the cyber threat within which it operates, and the implications of being in that environment for its business and the adequacy of its cyber risk mitigation measures. - Testing: All elements of a cyber resilience framework should be rigorously tested to determine their overall effectiveness before being deployed within an FMI, and regularly thereafter. - Identification: Identify which of their critical operations and supporting information assets should, in order of priority, be protected against compromise. - Governance: Cyber governance refers to the arrangements a company has put in place to establish, implement and review its approach to managing cyber risks. - Protection: Cyber resilience depends upon effective security controls and system and process design that protect the confidentiality, integrity and availability of an FMI s assets and services. - Detection: Ability to recognize the signs of a potential cyber incident, or detect that an actual breach has taken place. - Recovery : Ability to resume critical operations rapidly, safely and with accurate data in order to mitigate the potential risks of systemic failure to meet the obligations when participants are expecting them.

48 GUIDE CYBER RESILIENCE IOSCO Governance Alignment with Guidance on Cyber Resilience for Financial Market Infrastructures: MAIN IMPLEMENTATIONS - DECEVAL Policy Information Security, Cybersecurity Standards, Integrated Risk Manual, Cyber Security Guide, Audit and Risk Committee, Internal Risk Committee, Management reviews, Roles and responsibilities Identification Crisis and Business Continuity Management, Cybersecurity Standards, Asset Classification, Information Risk Management Protection Detection Response and Recovery Cybersecurity Risk Management, Cybersecurity Standards, Cybersecurity By Configuration Item Tools: Firewall, IPS, epo, DLP, Policy Auditor Incident Management Process, Information Security Monitoring, Manual of monitoring platform on Core applications, Analytical Risk Model Tools: QRadar, Imperva, DLP Crisis and Business Continuity Management, Cyber security Standards, Cyber security Risk Management, Backups, Alternate Data Center, High Availability Testing Periodic Testing, Ethical Hacking, Evaluation and Testing of Business Continuity Program Situational Awareness Cybersecurity Risk Management for the Securities Market, Crisis Management for Securities Market Learning and Evolving Frameworks: ISO 27001, ISO 22301, ISO 31000, COBIT, IOSCO, Sensitization: Managing passwords, Cyber security training processes, Training on specialized tools

49 CYBER SECURITY MANAGEMENT 2016 GENERAL ETHICAL HACKING: 2 MONITORING ACTIVITIES 193 SPECIFIC ETHICAL HACKING: 6 VULNERABILITY ANALYSIS: 2 TRAINING ACTIVITIES 10 CYBER SECURITY RISK MANAGEMENT 27 SECURITY MARKET CYBER SECURITY WORKING GROUP 6 COMPANIES ADDITIONAL EVALUATIONS IOSCO, PKI EXTERNAL CONFERENCES 3 ASSESSMENT / CONTRACTS 26 UPDATING POLICIES AND PROCEDURES 7 EXECUTION OF AUDITS TO SUPPLIERS EMPLOYEES TRAINED 100% 12 COMMITTEES 16 AUDITS COMPLETED 9

50 CRISIS AND BUSINESS CONTINUITY MANAGEMENT PROGRAM SUMMARY Deceval is commited to the Colombian Securities Market through its Crisis and Business Continuity Management System Scenarios: SOME FACTS Technological failure Facilities failure Human resource failure Operational failure Third party failure Reputational crisis Contingency Operations Center Tests per year Business processes covered by the program People covered by the program Internal areas with a continuity plan Customers covered by the contingency strategy Years working in Crisis & Business Continuity Management Contingency Datacenter Hot-Site Hour RTO Min RPO

51 TEST SUMMARY TESTS AND EXERCISES Objective: To verify and improve contingency plans and strategies, including operational and technological scenarios, and also including communications and crisis response strategies. experiencia consistente Business Continuity General Test Call Tree Activation Facilities Failure Operative Strategies for each area: IT Partial Tests Applications Data Bases Information Security Networks Servers Business Areas Strategies for each area COC monthly test Feb. 27 Mar 10 May 2-12 Aug Nov April September February May August November Jan. Dec.

52 Crisis Management System Crisis Management System Development Crisis Management Team Training Programs Crisis Management Definition of Teams Crisis Management Teams - Skills Diagnosis PREPAREDNESS FOR NEW MAJOR SCENARIOS: Earthquake Cyber attack

53 O B J E C T I V E S INCREASE MARKET RESILIENCY BUSINESS IMPACT ANALYSIS Crisis Management - Securities And Foreign Exchange Markets CM RISK ASSESSMENT PREPARE FMIs TO FACE MAJOR CRISIS CRISIS MANAGEMENT AND COMMUNICATION PROTOCOL R E S U L T S