Country Manuals Private Banking –
Dear Client,
We would like to inform you that BRP has updated its COUNTRY MANUAL ASSET MANAGEMENT for the following jurisdiction:
- CHILE
| SOURCE OF CHANGES | ANSWERS |
|---|---|
| Law / Regulation | YES |
| New Position of the Authorities | NO |
| Evolution of Expert’s interpretation | YES |
Regulatory Template, Regulatory Summary and Behaviour Template
Material changes
Financial Advisory Act
The new Law No. 21.314 (the “Financial Advisory Act”) regulates for the first time the provision of independent investment/financial advisory services in Chile.
Under the new rules, investment advice may now only be provided onshore in Chile on a “habitual basis” by persons/entities that are duly registered in the Registry of Investment Advisors established by the Financial Market Commission (the “CMF”), unless they are already licensed to provide financial services in Chile, such as banks incorporated in Chile, insurance and reinsurance companies, intermediaries of publicly offered securities, fund managers authorized by law and portfolio managers supervised by the CMF. According to local experts, the term “habitual basis” must be interpreted in a strict way.
Pursuant to art. 3 of the Financial Advisory Act, the term “investment advice” is generally understood to be the provision, by any means, of services or the offer of products to the general public or to specific sectors of it, related to investment in financial instruments of any kind.
General Ruling No. 452
According to General Ruling No. 452 (the “GR 452”), an offer may be considered “private” if it is addressed to a maximum of 50 Retail Clients (or Clients who do not qualify as Professional Investors respectively), provided that all other requirements pursuant to General Ruling No. 336 (the “GR 336”) are met.
In addition, it is not necessary for the recipients of an offer to comply with the quantitative and qualitative requirements set out in GR 336 if the price per unit of the securities offered is at least equal to 3’000 Unidades de Fomento (UF).
Moreover, the information provided to the recipients of the offer, which must be included in all communications and materials sent to them may be in English, without the need for translation into Spanish (any other language other than Spanish or English must still be translated into either one of these two languages).
Material changes
In line with the regulatory changes outlined above, the Country Manual has been reviewed to ensure that the content of all the documents remains accurate and up to date.
The changes/modifications are as follows:
> Presenting the Company in general terms or explaining an investment advisory or discretionary asset management agreement is not subject to licensing requirements in Chile. However, contracts must be accepted, concluded and executed abroad, i.e. the foreign (non-licensed) investment firm must countersign them outside of Chile. The CM AM Behaviour Template (CM AM BT) therefore now provides the answer “NO” in the relevant onshore scenarios, both directly performed and indirectly performed (via/with locally licensed intemediaries/distributors).
> Performing road shows onshore in Chile is no longer permitted to the extent that information is provided that goes beyond “general” information about the Company and is therefore considered advertising/marketing of investment services and/or products. This triggers licensing requirements in Chile and is only permitted if done in accordance with “current market practice” (i.e. on a strict one-to-one and occasional basis). The CM AM BT therefore now provides the answer “NO” in the relevant onshore scenarios, both directly performed and indirectly performed (via/with locally licensed intemediaries/distributors).
> For the same reason, the provision/handing over of services and mandates as well as product specific marketing material and product information (term sheets, prospectuses, brochures, presentations, etc.) is now only permitted within the framework of this “current market practice”. The CM AM BT answers the relevant cross-border and onshore scenarios with “Grey zone/YES – Permitted in accordance with the “current market practice” (or on request)”.
For more information, please contact us: info@brpsa.com
Best regards,