On September 7, the Financial Markets Commission (CMF, for its acronym in Spanish) presented its Strategic Plan 2022, envisaging the implementation of a series of regulatory initiatives; prudential supervision and market conduct; sanctions and institutional development. The measure aims to strengthen the Commission’s capabilities to safeguard the solvency of the institutions, their conduct in the market and the protection of financial clientele. It also addresses the opportunities and challenges faced by technological breakthroughs in the financial system, seeking to improve accountability mechanisms and move towards results-based management. The CMF reported that it is monitoring the operation of Banco Estado, after the entity reported, that it had detected malware in its systems via the Operational Incident Reporting (RIO, for its acronym in Spanish) system.
The Strategic Plan will be developed in three phases:16 initiatives begin this year, another 15 in 2021 and the last one in 2022. This year envisages the implementation of the Basel III standards as well as a bill to strengthen the bank resolution legal framework and a final proposal to regulate Fintech in the securities field and create an integrated oversight policy and model.
The Plan’s objectives and initiatives include the following:
- Strengthening solvency among institutions
Development of nine measures to strengthen the Commission’s regulation safeguarding solvency for banks, insurance companies and financial intermediaries. These include: launching the implementation of the Basel III standards for banking; design and presentation of a proposal for a bank resolution; a proposal for conglomerates; design and implementation of an integrated regulatory process; and strengthening the regulatory framework for risk-based supervision in insurance.
It also envisages a set of initiatives to strengthen and systematize processes for supervising solvency in the institutions, including creating an integrated oversight policy and model; implementing a macroprudential risk management process, creating a conglomerate oversight model, and the latest developments in the oversight scheme supporting the implementation of Basel III.
- Safeguarding market conduct and protecting financial clients
The Plan aims to improve the regulatory and oversight capabilities of the Commission to encourage proper conduct in the market and protect financial clients. In this context, it contemplates the design and implementation of a Market Conduct Oversight Policy to protect financial clients; design and implementation of an oversight policy designed to promote transparency and integrity in the securities market; and strengthening of market abuse monitoring tools.
In turn, a sanctions policy envisages initiatives aimed at strengthening the Commission’s ability to punish more serious infractions and strengthen its investigative capabilities.
- Technological challenges and opportunities
The initiative addresses the opportunities and challenges of technological development in the financial system, to lay the ground for the development of suitable services able to meet user needs. These include initiatives aimed at a legal proposal to close gaps in the capital market in areas such as Fintech and Crowdfunding; an action plan to close gaps in the are of operational risks and cybersecurity; and the implementation of a data governance system.
- Institutional Development
Finally, the Plan includes a set of initiatives to improve the mechanisms for managing results and accountability within the Commission, and improve financial system user satisfaction. These include the support program for process integration and improvement, strengthening technical skills, integrating and optimizing Human Resources policies and processes, and making improvements in citizen service processing mechanisms provided by the CMF.