The Chilean financial market has just taken a transcendental step with the recent implementation of the Fintec Law, approved in 2023. Its main objective is to promote competition, innovation, and inclusion in the financial system.
As part of this process, the Financial Market Commission (CMF) published General Rule No. 514 (NCG 514) on July 3, 2024, which regulates the Open Finance System (known by its Spanish acronym SFA) created by Law 21.52. This regulation, which will become effective 24 months from the date of publication, establishes the guidelines for the operation of the SFA.
The SFA allows individuals and companies to share their financial information, allowing them to access better conditions or new products and services that better suit their needs. This initiative represents a milestone in the development of the Chilean financial market, laying the foundations for an era of greater competition, innovation, and accessibility for all users.
What is the Open Financial System?
The Open Financial System (SFA) allows users to share their financial data securely to obtain better services and conditions. This information exchange model has an essential condition: the user’s consent and the exchange of information must be done through remote and automated access interfaces (APIs-Application Programming Interfaces). The system is based on the fact that people own their financial information.
This fosters competition, financial inclusion, and innovation. Users authorize Information Provider Institutions (IPIs) to transfer their data to PSBIs, for example, to apply for credit with a better interest rate.
In addition, users of prepaid card accounts will be able to instruct Payment Initiation Service Providers (PSIPs) to transfer funds to other bank accounts. All these Actors must comply with the Financial Market Commission’s (CMF) regulatory requirements to preserve financial stability, prevent crime, and protect customers.
Fuente: CMF
NCG 514 regulates various aspects of the SFA in Chile, divided into six main sections:
1. Perimeter of the SFA
2. Operation of the system
3. Security and safeguarding of the system
4. System information
5. Other provisions (suspensions, penalties, implementation, information requirements, and entry into force).
6. Regulatory annexes (regulating variables for information sets, products, technical issues, and cost-sharing specifications).
Among the main topics addressed are:
– Registration and enrollment requirements for Financial Information Service Providers (FISPs) and Payment Initiation Service Providers (PISPs).
– Registration of Information Payment Institutions (IPI), Credit Payment Institutions (CPI), and other entities in unique lists.
– Minimum standards for delivery, security, authentication, and verification.
– Customer consent requirements
– Thresholds for reimbursement of costs for the use of interfaces
– Data to be shared and exchanged
– Gradual implementation
NCG 514 complements the regulations previously issued by the CMF on registration, authorization, and obligations of Fintec Financial Service Providers.