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Payment Cards: Superintendence Of Banks And Financial Institutions Issues New Regulations

Author:Mr Diego Peralta and Diego Lasagna
Profession:Carey
 
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On November 28, 2017, the Superintendence of Banks and Financial Institutions ("SBIF") issued four regulations regarding debit, credit and prepaid cards (the "Payment Cards"), with the purpose of complementing and making fully applicable the reforms contained in the Law 20,950 and the new regulations regarding retail payment methods, previously issued by the Central Bank of Chile, in the following terms:

1) Rule No 1, which contains general provisions applicable to non-banking entities who issue Credit and Prepaid Cards (the "Non-Banking Issuers").

The most relevant provisions set by this Rule No 1 are as follows:

Provisions regarding the information to be requested by the SBIF to the Non-Banking Issuers when an application for existence and registry in the Payment Cards Issuers Register is filed; Algorithms and calculation parameters of the minimum patrimony and liquidity requirements required. This patrimonial requirement will be reviewed by the SBIF on a quarterly-basis; Enactment of an integral framework regarding management and risks control, whose minimum content is fixed by the SBIF; Minimum contents of the contracts agreed between Non-Banking Issuers, Payment Cards operators and the persons who accept Credit and Prepaid Cards as payment methods ("Affiliated Entities"); Credit and Prepaid Cards characteristics and use conditions; Basic information, and reports and periodic communications that must be delivered to the SBIF, being expressly applicable, among others, the provisions of Chapter 20-8 of the updated regulations compendium issued by the SBIF ("RAN"), regarding immediate notification of relevant operational contingencies; Accounting and financial regulations applicable to Non-Banking Issuers, among which it can be highlighted the guidelines regarding credit risk provisions, the accounting treatment of the unpaid credits, and the financial information model to be provided to the SBIF, all of which have similar logics than the banks provisions, and Provisions regarding supervision of the Non-Banking Issuers, expressly establishing the authority of the SBIF for performing exhaustive inspections regarding all the matters of its interest, within its powers' framework. 2) Rule No 1, which contains general rules applicable to Payment Card operators.

The following rules can be highlighted:

Provisions regarding the background that SBIF will request, when an application for existence and registry in the Payment Cards Operators Register is filed;...

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