New Chilean Fintech Law aims to promote competition and innovation in financial services

After three years of deliberation in the Chilean Congress, the Fintec (Fintech) Law was published in the Official Gazette on January 4 and will enter into force 30 days after that date. The law will provide legal certainty to this type of company, which has grown significantly in recent years and will regulate the financial services market.

Law 21,521 (Fintec Law) regulates the technology market in financial services by promoting competition and inclusion through innovation and digital resources. In addition, the new regulation establishes principles to protect the financial client, safeguard the data processed, preserve financial integrity and stability, and measures against money laundering and obtaining resources from drug trafficking and terrorism.

The services regulated by the law are:

  • Crowdfunding platforms
  • Alternative transaction systems
  • Credit and investment advisory services
  • Custody of financial instruments
  • Order routing and intermediation of financial instruments.

The Financial Market Commission (CMF, Comisión para el Mercado Financiero) will be in charge of compliance with the provisions of the Law. The company must be registered in the Registry of Financial Service Providers administered by the CMF to participate in the provision of these services (except for some entities due to their line of business and legal framework), which must issue a decision within 30 working days on the application for registration. In the case of foreign entities providing these services, they must prove domicile in Chile.

Before rendering the services mentioned above, the authorization of the CMF must be obtained by the company. The Commission will have six months to approve or reject the consent based on a series of requirements established in the legal framework. In addition, the Commission may revoke the authorization granted at any time through a well-founded resolution.

In the case of current providers will have twelve months from the issuance of the General Rule to submit their respective applications for registration and authorization to the CMF.

The regulation also provides for an Open Banking System that recognizes clients’ ownership of their financial information and empowers them, with their express consent, to share it. Financial institutions will allow them to share data (reducing the information asymmetry of incoming players) and offer a broader, more personalized range of products.

Virtual financial assets or crypto-assets are now recognized as financial instruments and have become subject to regulation by the CMF.

The new law also makes amendments to other legal bodies, among which are: the General Banking Law, Financial Market Law, Economic Analysis Unit Law, Law on Corporations, Law on the Administration of Third Party Funds and Individual Portfolios, Law regulating Insurance Companies, and Commercial Code.

Review Law 21.521 (Fintec Law) here.

Scroll to top