Indeval provides clearing and settlement services for all securities transactions executed in the Mexican Financial system with different settlement/transfer mechanisms:

• Free of Payment: A transfer of securities without a corresponding transfer of funds. Free of payment transactions settle right after instructions are matched and once the delivering participant has the position available in its account.

• Delivery versus Payment: A securities settlement mechanism that links a securities transfer and a funds transfer in such a way as to ensure that delivery occurs if and only if the corresponding payment occurs. These instructions are paid intra-day once securities are available in the seller’s account and the buyer has either the full or a partial amount of the cash. In this latter case, a partial settlement will occur. Through the settlement optimization algorithm, net securities and cash move simultaneously.

Indeval’s Delivery Against Payment (DvP) model combines securities netting and cash netting (Model 3 according to the Bank for International Settlements – net securities and net cash), as well as a trade-for-trade settlement (Model 1 according to the Bank for International Settlements – gross securities and gross cash)

- Indeval Settlement System: DALI –

DALI offers secure communication via Indeval’ Financial Protocol (PFI for its acronym in Spanish) with a settlement algorithm bases on ISO 15022 format messages.

All instructions received in DALI are bilaterally matched and irrevocable. On an intra-day basis, the system runs every two-minute cycles to check securities and cash availability. Once these conditions are met, settlement occurs in real-time following a settlement optimization algorithm, which nets cash and securities following a settlement Model 3 according to the Bank for International Settlements (net securities and net cash). Allowing partial settlements increases liquidity and early settlement rates.

At the end of the day, any unsettled trades on the settlement date, including the partially unsettled, are dropped, and both parties are required to submit new instructions and any remaining cash balances within DALÍ are distributed back to the participants' cash accounts at the Central Bank.