Persons who provide investment advice “on a regular basis” will be required to be registered with the Comisión para el Mercado Financiero (CMF) in Chile.  There is no clear guidance on what constitutes “a regular basis.”

The CMF is responsible for safeguarding, regulating and developing the financial market in Chile. It has supervisory and enforcement powers over certain market participants.

“Investment advice” is generally defined as the supply of services, or offer of products, to the general public of Chile or a sector of the general public of Chile that relate to the investment of financial instruments of any kind.

The CMF is required to issue regulations by April 13, 2022  in order to establish registration requirements and rules that apply to investment advisers and their activities. Firms that are  authorized in Chile as Banks, Insurance Companies, Broker-Dealers, Investment Fund Managers and Portfolio Managers are not required to register in the new registry.

The impact on firms outside of Chile providing investment advice cross-border into Chile  (e.g., from the US) is not yet known, but may become clearer when the CMF issues the new regulations. 

The new requirements will become effective 90 days after the CMF issues its regulations.

Author

Rebecca Leon is a partner in Baker McKenzie's Financial Regulation and Enforcement Practice Group. She counsels broker-dealer and other financial services clients on a wide range of state and federal securities law issues, as well as on compliance with the rules of the Financial Industry Regulatory Authority (FINRA). She assists clients with a panoply of intercompany, customer and industry agreements and works closely to guide financial services firms on structuring and developing their global operations.