On Monday, Febraury 11, the Commission for the Financial Market (CMF) published the report “General Guidelines for the Regulation of Crowdfunding and Related Services“. It is the result of a public consultation initiated last November by the institution with a view to initiate the process of regulation of fintechs in Chile. It recommends the regulation of crowdfunding, financial advisory services, alternative transaction systems and the custody mechanisms of financial instruments.  The CMF will use this report as a basis for collecting further precisions before presenting a concrete proposal for regulation in the area of financial technologies.

The report focuses on the regulation of crowdfunding platforms and their associated activities. It recommends advancing in regulations regarding financial advisory services, channeling of purchase, sale or payment orders, alternative transaction systems and custody of financial instruments.  Regulations in these areas will be guided by the principles of proportionality, neutrality, comprehensiveness, flexibility and modularity.

For each of these services, a proposal is made for specific and differentiated requirements in response to the risks involved, which may involve registration requirements, information requirements, knowledge accreditation, risk management, solvency and liquidity and prevention of money laundering and financing of terrorism.

The document recommends the use of Innovation Hubs over Sandbox platforms to promote innovation in the country. These hubs are formal instances implemented by sector regulators to accompany the understandings that generate technological innovations in the process of registration, licensing and definition of regulations that will govern them once they reach the scale that merits greater regulation and oversight.

The CMF explained that this document will serve as a basis for the formulation of additional comments and precisions. With them the CMF will present an adequate regulatory proposal to “promote innovation and create greater inclusion in the provision of financial services“. However, they have not specified the precise deadlines for this to happen.

Also, the CMF published the general standard 431 which modifies the terms of presentation of financial statements that apply to issuers of public offer securities, special corporations and all funds audited by it. These will become effective as of 2019 and will range from 60 to 90 days depending on the type of entity.