Asset and portfolio management through Fintech platforms is not new in Chile. However, absent specific regulation on the matter, certain cases involving fraud in the custody and deposit of financial instruments or money, on account of third parties, have heightened the scrutiny on all portfolio managers, not only Fintech related ones and possibly prompted the action to issue regulation on the latter.
Assuming that purely technology and software for rendering of the asset and portfolio management services will be provided, there is no specific regulation regarding FinTechs in this line of business. Accordingly, and apart from general rules applicable to service providers (such as initiation of activities before the Chilean Internal Revenue Service), there generally are no specific license, minimum capital or solvency requirements.
The White Paper however, suggests that proper legislation in the matter should include: Registration with the CMF, Periodic Information to the CMF and the public and Internal Risk Management Compliance requirements for general asset and portfolio management services. However, if deposit or custody of financial instruments or money are involved, the White Paper suggest increasing the legal requirements to such entities by including the provision of guaranties and minimum paid-in capital.
However, if the scope of the services extends to the administration of investment, mutual or public investment funds the entity shall establish itself in Chile as a formal fund administrator under the oversight of the CMF and shall fulfill certain specific requirements such as minimum capital and guaranty requirements.
Information regarding revenues and customers is not readily available.
The scope of the services should be carefully analyzed on a case by case basis in order to assess any potential risks relating to compliance with consumer protection, data privacy and other laws generally applicable to service providers.
Rodrigo De Alencar