Chile's Financial Regulator Imposes Sanctions, Adjusts Rules in 2023 Oversight

The Comisión para el Mercado Financiero (CMF), Chile's financial market regulator, took significant actions in 2023 as part of its oversight responsibilities. The CMF imposed sanctions on various entities and individuals for violations related to the financial market, made payments to an anonymous whistleblower who provided information leading to the detection of wrongdoing, and adjusted regulations to enhance the oversight and transparency of the Chilean financial market.

According to the CMF's Public Account for 2023, presented by President Solange Berstein, the regulator oversees more than 7,000 entities that manage 77% of the country's financial market assets, equivalent to $642 billion. In 2023, the CMF issued 91 regulations and conducted 35 public consultations and regulatory impact reports. Key regulatory updates include rules for banks' internal liquidity adequacy assessment process (ILAAP) and new mortality tables for insurance companies.

The CMF also focused on market conduct supervision, including compliance with the law on alimony payments and related-party transactions. The regulator received 391 complaints of financial market infractions and imposed 122 sanctions, 75% of which were fiscal benefit fines. The anonymous whistleblower mechanism, introduced in 2021, has received 55 requests for recognition and paid out UF 11,160 in compensation.

Why this matters: The actions taken by Chile's financial regulator in 2023 demonstrate its commitment to maintaining the integrity and stability of the country's financial market. The imposition of sanctions, payments to whistleblowers, and regulatory adjustments highlight the CMF's efforts to protect investors and ensure compliance with financial regulations.

President Berstein highlighted key challenges for the CMF, including implementing the new Open Finance System, incorporating climate and cybersecurity risks, and strengthening the legal and regulatory framework to enhance the resilience of the financial system. The CMF participated in conferences and seminars with authorities, including a presentation by President Berstein at the ICARE Finance Circle on April 16, 2024, and a seminar on the 'Right to Oncological Oblivion' organized by the Senate and CECA on April 15, 2024.

Key Takeaways

• Chile's financial regulator CMF imposed sanctions, paid whistleblowers, and updated regulations.
• CMF oversees 7,000 entities managing 77% of Chile's $642B financial market assets.
• CMF issued 91 regulations, conducted 35 consultations, and updated bank liquidity, insurance rules.
• CMF received 391 complaints, imposed 122 sanctions, 75% of which were fiscal fines.
• CMF faces challenges implementing Open Finance, incorporating climate/cyber risks, and strengthening regulations.