Chile Finance Law: New Obligations for Corporate Groups

Written by León Lanis V., Paralegal

Recently, the Financial Markets Commission of Chile (CMF) issued a new General Ruling (NCG N°505) which establishes new obligations for certain regulated companies to inform the CMF about the corporate group they are from, specifying how and when this should be informed. In this blog we will highlight the key features of this new regulation.

What is a corporate group?

Under Article 96 of Law N°18.045 (Securities Market Law), a corporate group is a set of entities that are so linked in their ownership, management or credit responsibility that it is presumed that the economic and financial activities of its members are guided by or subordinated to the common of the group, or that their common financial risks in the loans granted to them or in the acquisition of securities issued by them.

The following companies are considered to be part of the same corporate group:

1. A company and its controller,
2. Every group of companies with a common controller,
3. Any company that triggers the following elements:
   1. That a substantial percentage of the company’s assets are committed to a corporate group.
   2. That a company has a substantial amount of indebtedness and that a corporate group has a major shareholding as creditor or guarantor of such debt.
   3. That a company is a controlling member referred in the aforementioned points; and,
   4. The company is controlled by one or more members of the controller of one of the entities of the corporate group, if that controller is composed of more than one person.

To whom does NCG N°505 apply?

This general ruling applies necessarily to the following companies:

1. Entities issuing securities registered in the Securities Registry
2. General fund managers
3. Portfolio managers
4. Pension fund management companies
5. Insurance companies
6. Stockbrokers
7. Securities dealers
8. Commodity brokers
9. Banks
10. Servicers of endorsable mortgage-backed securities.

Next-steps

The aforementioned companies will now have to inform the CMF of the corporate group they form part of, from May 1st to May 25th, 2024. By the start date, the Commission will issue a link, within the regulated entities platform, in order for companies to fill-in the necessary data. Noncompliance may ensue fines and registration cancellations.

Harris Gomez Group METS Lawyers ® opened its doors in 1997 as an Australian legal and commercial firm. In 2001, we expanded our practice to the international market with the establishment of our office in Santiago, Chile. This international expansion meant that as an English speaking law firm we could provide an essential bridge for Australian companies with interests and activities in Latin America, and to provide legal advice in Chile, Peru and the rest of Latin America. In opening this office, HGG became the first Australian law firm with an office in Latin America.

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