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Public offering in Chile of offshore securities

On January 18 1999, Law 19,601 was enacted authorizing public offerings of offshore securities or securities deposit receipts (SDR) in Chile, provided they have been registered with the Superintendency of Securities and Insurance (SVS).

Offshore securities can be denominated and traded in Chile in foreign currencies expressly authorized by the Chilean Central Bank, and can be transferred and assigned under the rules applicable to the nature of the relevant security and, in the case of SDRs, under the same rules applicable to the shares of stocks of Chilean publicly traded corporations.

Only banks authorized to operate in Chile and other entities expressly authorized by the SVS with a line of business and financial track record that make them substantial players in the financial markets are allowed to act as custodian of offshore securities.

The SVS will only register offshore securities whose issuer is registered with the applicable regulatory entity in its country of origin or in such other country where they are traded.

The party registering the offshore securities must provide the SVS and the stock exchanges in which they will be traded in Chile with information on the issuer and its securities in the time and manner determined by the SVS through a general ruling.

The SVS will have the power to authorize the trading of offshore securities over-the-counter, or to restrict their transactions to specific markets if it deems the information provided on them as insufficient.

Cristián Eyzaguirre

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