On February 23, 2017, Law N°21,000 (the "Law") was published in the Official Gazette of Chile, creating the Commission for the Financial Market (the "Commission"), a professional body and technical entity that will replace the current Superintendency of Securities and Insurance ("SVS"). The Law will enter into force in August 2018, or at an earlier date if the Commission becomes operational sooner.
The SVS and the local capital markets have long sought the implementation of this Law, due to the need for a regulatory body with an improved corporate government, equivalent to regulators in developed markets, with greater and more effective control and specific administrative sanctioning regimes.
Purpose and scope
The Commission shall aim to ensure the proper functioning, development and stability of the financial market, facilitating the participation of market agents and promoting duly standards. Furthermore, it shall also ensure that regulated persons or entities comply with laws, regulations, statutes and other provisions governing them.
Any institution, person or activity expressly subject to the supervision of the Superintendency of Banks and Financial Institutions is outside the Commission's jurisdiction. Notwithstanding the aforementioned, a one-year deadline has been established for the presentation before the National Congress of a law expanding the Commission's jurisdiction. Likewise, pension fund administrators are not subject to the supervision of the Commission.
In order to fulfill its objective, the Commission will maintain the powers already vested in the SVS (e.g. to issue rules, to interpret applicable law on administrative grounds, to investigate complaints or claims, to examine all operations, assets, books, accounts, archives and documents of persons, entities or activities under its supervision, among other faculties).
However, important new attributions are added to the Commission, such as requiring information on banking operations of specific persons, even those subject to secrecy or confidentiality; gaining access to private properties and, if necessary, entering by force with the help of law enforcement officers; registering and seizing all kinds of objects and documents; intercepting all kinds of communications (and obtaining from telecommunication companies copies and records of communications transmitted or received by them), and ordering other public agencies to provide background information, even when...