Otto had a 64 and Lynn shot a 65 for a 12-under total of 130. Bernd Wiesberger and Chris Doak were one stroke behind.
Lynn was one of seven golfers tied for the lead after the first round on the Oceanico Victoria Golf Course. He had a bogey-free round, including an eagle, to stay atop the crowded leaderboard.
Waring made eight birdies, while Otto finished with six birdies and an eagle to go with one bogey.
Waring is playing on a medical exemption after undergoing a wrist operation, but has finished in the top 10 at four tournaments since April.
"I've been playing better for the last few months," Waring said. "I lost by one in Valencia, two in Gleneagles, been knocking on the door a few times, so it's nice to keep myself in contention week on week."