Canada    FinTech Guide    Chapter 15    Chile


15. Initial Coin Offerings (ICOs)
Chile  Chile

The legal and business environment has become increasingly sensitive in this area during the recent months. Banks have closed accounts opened by FinTechs and these have filed claims against said banks based on a purported anticompetitive behavior. Tax authorities have also publicly stated that they will begin a review of the laws and regulations applicable to FinTechs (given, often times, their multi-jurisdictional operations).



Legal Affairs


There is no specific regulation regarding ICO’s or TGE’s in Chile. However, it should be noted that, for the purposes of the Chilean Securities Law, the term securities shall mean any transferable instruments including shares, stock options, bonds, debentures, mutual fund shares, savings plans, negotiable instruments, and, in general, any credit or investment instrument. Accordingly, though not expressly regulated, should the Financial Market Commission (Comisión para el Mercado Financiero (“CMF”), equivalent to the SEC) consider them to be within the term securities, the public offering of coins and/or tokens would be subject to regulations applied by our Securities Laws and regulations to securities offerings.

Licence and costs: In case ICOs are characterized as securities, public offerings thereof require that both the issuer and the token/coins are registered with the CMF.

Token classification: Although no specific classification has been issued so far, there is a high likelihood of token/coins being characterized as securities and thus fall within the regulatory framework applied thereto by the CMF.

Prospectus: In the case ICOs are characterized as securities and a public offering thereof is carried out, a prospectus is required. For reference, the CMF has drafted several regulations regarding the requirements a prospectus must meet (e.g., CMF General Rule 30 and 118 (both as amended) for public stock issuances; CMF General Rule 30 (as amended) for bonds and commercial papers; CMF General Rule 303 for securitizations; CMF General Rule 352 for stock issued by foreign companies and CMF General Rule 304 for bonds issued by foreign companies or governments).

AML/KYC: As a Law Firm, standard KYC procedures suggested by the Chilean Bar Association and the Unidad de Análisis Financiero (“UAF” – Financial Analysis Unit, which is a Government Agency responsible for preventing and controlling money laundering and related asset cleansing).



Economic Conditions


There is no public data on the subject matter. Press reports assure that the industry has grown over 30% in the past 18 months and that Chile is becoming the 4th regional hub in the region (Mexico, Brazil and Colombia) measured by the number of new Fintechs. We cannot give any assurance as to the accuracy of these reports. The legal and business environment has become increasingly sensitive in this area during the recent months. Banks have closed accounts opened by FinTechs and these have filed claims against said banks based on a purported anticompetitive behavior. Tax authorities have also publicly stated that they will begin a review of the laws and regulations applicable to FinTechs (given, often times, their multi-jurisdictional operations).


Contributing Authors

Urenda, Rencoret, Orrego y Dörr

Rodrigo De Alencar
Santiago, Chile


Nicholas Mocarquer
Santiago, Chile

Search by:

Chapter Index:


1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

Disclaimer:
The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018