This concludes the first stage of the implementation process of the Fintec Law, which has included several instances of public participation.
On january 12, the Financial Market Commission (CMF) issued the General Rule (NCG) that regulates the registration, authorization and obligations of financial service providers under the law.
After its publication in the Diario Oficial, the regulation will be in force as of february 3, completing the regulatory framework for the seven financial services regulated by the CMF as established in the Fintec Law.
This new legal body is aimed at those professionally engaged in the provision of the following services in Chile:
- Investment Advisory.
- Credit Advisory.
- Crowdfunding Platform.
- Alternative Transaction System.
- Order Routing.
- Intermediation of Financial Instruments.
- Custody of Financial Instruments.
However, this new regulation repeals NCG No. 493 and No. 494 of the CMF, in order to establish in a single regulatory body the instructions and requirements to be complied with, as follows:
Registration in the Registry of Financial Service Providers: In order to request this registration, an application must be entered through the CMF website, which must be submitted by the legal or conventional representative of the applicant, who will be responsible for the veracity and integrity of all the information provided.
Authorization for the provision of regulated services: Entities must request authorization from the CMF, which may be submitted together with the application for registration in the Registry of Financial Service Providers or once registered in the same, expressly indicating the service or services for which authorization is requested and accompanying the background information indicated in the law.
Disclosure obligations and delivery of information to clients and the general public: Financial service providers, independent of the activities they have been authorized to perform, shall implement policies, procedures and controls to comply with the information obligations referred to in the Law.
Corporate governance and risk management requirements: The provisions set forth in the Law must be observed in a proportional manner, considering the nature of the entity, its business model and organizational structure.
Capital and collateral requirements: Minimum equity and collateral requirements are established for entities providing financial instrument intermediation and financial instrument custody services, as well as collateral requirements for entities providing order routing services.
Accreditation of operational capacity: Those who provide the service of alternative transaction system, order routing, intermediation and custody of financial instruments must have the operational capacity to support the processing of operations or transactions.
Activities inherent to regulated services: The activities established in the regulation may be carried out without requiring authorization as a complementary activity.
It is important to highlight that the providers of collective financing platform services, alternative transaction systems, credit counseling, custody of financial instruments, routing of orders and intermediation of financial instruments must submit the respective applications for registration and authorization before February 3, 2025.
On the other hand, regarding the provision of investment advisory services, no entity will be able to provide these services as of february 3, 2024 without being registered in the respective registry and authorized by the CMF.
At az we highlight the implementation of this new regulatory framework for the inclusion of entities that were outside the regulatory perimeter; and we believe it will be a useful tool to satisfactorily achieve the prudential, conduct and market development objectives that the CMF defined with respect to the activities it regulates.
Details of the regulations are available in the Regulations section of the CMF website (www.cmfchile.cl). In addition, the CMF has enabled a special section on its website with all the details of the implementation process of the Fintec Law [See here].
To talk the implications of this new law, please contact our Corporate and Business and Compliance teams:
Álvaro Rosenblut | Partner | arosenblut@az.cl
Francisca Franzani | Director Compliance Group | ffranzani@az.cl
Raimundo Busquet | Associate | rbusquet@az.cl
Constanza Pasarin | Associate | cpasarin@az.cl
