Yesterday, October 4th, 2022, the Senate approved with 39 votes in favor and 6 abstentions, the particular text of the Bill that promotes competition and financial inclusion, through innovation and technology, in the provision of financial services, also called “FINTECH LAW”.
During the debate in particular, indications were presented both from the Executive and senators with the aim of strengthening personal data protection regulations, prevention of money laundering, as well as procedural aspects applicable to Fintech and tax information for the payment of obligations, among others. Likewise, during the particular discussion in the Senate, some amendments were introduced, such as the incorporation of a definition of “Fintech” (activities that involve the use and application of innovation and technological developments for the design, offer and provision of products and financial services), among other aspects.
As it was approved by the Senate, the project will return to the Chamber of Deputies in the third constitutional process, to ratify the changes introduced and thus become law.
MAIN CONTENT OF THE PROJECT
Registry of Financial Services Providers
It should be taken into consideration that the project seeks to regulate the commercialization of the following Fintech services, which must be registered in the Registry of Financial Services Providers managed by the Commission for the Financial Market (“CMF” for its initials in Spanish):
a) Crowdfunding platforms.
b) Alternative transaction systems.
c) Credit and investment advice.
d) Custody of financial instruments.
e) Routing of orders and intermediation of financial instruments.
The CMF will be in charge of supervising the provision of the aforementioned services, for which it will have the power to adopt the preventive or corrective measures deemed necessary for the due protection of investors. Likewise, the CMF may establish less burdensome forms of compliance with the requirements and demands of the law, through general regulations, with respect to those entities that, due to the nature of the service provided, do not compromise public faith or financial stability by not exceeding the limits established in the respective general rule.
Open Finance System
Other main aspects of the project is the establishment of a regulatory framework for “Open Finance”, with the aim of promoting competition, innovation and inclusion in the financial system. In this way, the exchange between different providers of information services of financial clients – who have expressly consented to it – is allowed, through remote and automated access interfaces that allow interconnection and direct communication between the institutions participating in the system.
The participating institutions of the Open Finance System will be those that qualify as:
a) Information provider institutions.
b) Information-based service provider institutions.
c) Institutions providing accounts.
d) Payment initiation service providers.
These institutions must adopt the necessary measures to allow the consultation, access, delivery and exchange of information, as appropriate, regarding the types of data, products and financial services related to financial clients -whether natural or legal persons, who have contracted products or financial services or carried out financial operations with them-, according to the standards determined by the CMF through a general rule.
In addition, rigorous security and confidentiality conditions are imposed on them, which could even lead to a ban from participating in the Open Finance system in the event of non-compliance. The supervisory role of the CMF in this area is also clearly established, for which it has broad powers of supervision and sanction.
The CMF will be in charge of issuing the necessary regulations for the implementation of the Open Finance System within a maximum period of 18 months from the publication of the law, being able to establish successive phases of implementation or differentiated terms according to a gradual implementation calendar.
Crypto assets
Other outstanding aspects of the bill is the introduction of “digital, electronic or computerized representations, registered by means of systems that use distributed registry technologies or other analogous ones, of units whose value is directly determinable and backed by money, either whether it is national or foreign currency, or documents that contain obligations payable in any of those currencies, and subject to such representations and systems complying with the minimum standards and conditions in matters of security, reliability, acceptability, use, massiveness, among others, that the Central Bank of Chile establishes as a general rule” as means of payment; amending for this purpose Law No. 18,840 Constitutional Organic Law of the Central Bank of Chile, General Law of Banks and Law No. 20,950 that authorizes issuance and operation of means of payment with provision of funds by non-bank entities, among others.
For more information on this Legislative Project and the changes it will bring about, see Congress Bulletin No. 14,570-05, available at:
https://www.senado.cl/appsenado/templates/tramitacion/index.php?boletin_ini=14570-05
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1. Notwithstanding the foregoing, entities already supervised by the CMF determined by law may provide the aforementioned services, without the need to be registered in the Registry of Financial Services Providers.
