Publications

Objectives

The Fintech Law maintains the guidelines proposed by the Financial Market Commission (the Chilean financial regulatory agency, the CMF) to the Ministry of Finance, and aims mainly to:

• Establish a general framework to encourage the provision of financial services through technological means, granting powers to the CMF for this purpose.
• Establish an open banking system for the exchange of customer information between the entities participating in such system
• Amend and update other laws in order to align their content with the provisions of the Fintech Law

Regulated activities

The services regulated by the Fintech Law, are:

1. Crowdfunding platforms
2. Alternative transaction systems
3. Intermediation of financial instruments
4. Order routing
5. Credit advice
6. Investment advisory
7. Custody of financial instruments.

In particular, the following aspects should be borne in mind:

• Registration in the CMF Register

Entities intending to provide one or more of the regulated services must register in the Register of Financial Services Providers maintained by the CMF.

The CMF has a period of 30 working days to decide on applications for registration, which period shall be suspended if it requests any amendments. Once the term has expired, the CMF must decide on the application and, if appropriate, register the applicant within three working days.

• Authorization to provide regulated services

In addition to registration with the CMF, in order to provide regulated services, prior authorization must be obtained from the CMF, which will be granted once compliance with the general requirements established by the Fintech Law and the specific requirements that the CMF will define for each regulated service by means of a general rule.

Other matters related to regulated services:

• Guarantees and equity requirements. The CMF may require guarantees and/or minimum equity from those providing regulated services, depending on their business volume or number of clients.
• Infringements. A specific regime of infractions is established which, among others, includes providing services without being registered or without having obtained prior authorization to provide the specific services, failing to provide the required guarantees, submitting false information and disseminating false, incomplete or misleading information

Open finance system

An open financial system is created to allow the exchange of information of financial clients who have expressly consented to it, through remote and automated access interfaces that allow interconnection and direct communication between the institutions participating in the system.

Participants in the system

Only those entities that are qualified as:

• Information providers (banks, credit card issuers, payment cards with provision of funds, and those defined by the CMF as Broker-Dealers, Fund Managers, etc.).
• Institutions providing information-based services (entities to be registered in the new register to be kept by the CMF for this purpose).
• Accounts Providers.
• Payment initiation service providers (entities in charge of instructing payment orders or electronic transfers on behalf of their customers, registered in the new register to be kept by the CMF for this purpose).

These entities must allow consultation and access to the information, in accordance with the conditions, terms and specifications to be defined by the CMF.

Composition of the system

The system shall comprise:

• General information on the financial products and services offered to the public.
• Information on the identification and registration of clients and their representatives.
• Information on the commercial conditions contracted and the use or history of transactions carried out by customers.
• Communications between financial service providers covered by the law regulating financial portability.
• Data or information necessary for the provision of payment initiation services.
• Other data or information relating to financial products or services as determined by the CMF.

The CMF should issue rules governing information exchange interfaces, cybersecurity measures, how to provide free, informed, express and specific consent and means of customer authentication.

Amendments to other laws

The Fintech Law establishes amendments to various legal bodies, among which we find:

• Law No. 20,950, referring to the issuance and operation of means of payment with provision of funds or any other similar system by non-banking companies.
• Law No. 18,840, organic law of the Central Bank of Chile.
• Law No. 18,045 on the Securities Market, establishing, among other matters, a simplified registration regime for debt securities that meet certain requirements to be determined by the CMF.
• Law No. 18,046 on Corporations, modifying, among other matters, the number of shareholders to be considered an open corporation from 500 to 2,000 shareholders.
• Decree Law No. 251, incorporating, among other matters, the so-called parametric insurance policies.

Validity

The rules relating to regulated services and the System will be in force from the date of entry into force of the corresponding regulations issued by the CMF. The rules relating to the system must be issued within 18 months of the publication of the Fintech Law.