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FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.
Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.
Introduction
Attitude of the country towards modern asset and portfolio management services
FinTech Law has established a regulatory framework aimed at promoting and facilitating the adoption of new technologies in order to: (i) encourage financial innovation and the creation of new products; (ii) facilitate the entry of new competitors to enhance competition; (iii) generate greater financial inclusion; and (iv) improve prediction of customer characteristics and needs.
FinTech law expanded the CMF’s regulatory perimeter to include investment and loan advisory services, custody of financial instruments, intermediation of financial instruments, among others.
In this matter, FinTech Law modified Law No. 20.712 on Administration of Third-Party Funds and individual Portfolios, by incorporating amendments to ensure regulatory symmetry in terms of asset requirements, guarantee requirements, staff and system suitability requirements, and technological innovations in these business models.
Legal affairs
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Apart from general rules applicable to service providers (such as initiation of activities before the Chilean Internal Revenue Service), the FinTech Law introduced changes in this industry, as said above, to ensure regulatory symmetry in terms of asset requirements, guarantee requirements, staff and system suitability requirements, and technological innovations in these business models.
If the scope of the services extends to the administration of 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 fulfil certain specific requirements such as minimum capital and guaranty requirements.
FinTech Law provides that only entities enrolled in the public “Registry of Financial Services Providers” (RFSP) administered by the CMF may professionally provide asset and portfolio management services, as long as they comply with the requirements contemplated on said FinTech Law. Amongst these obligations is the need to inform the public, via their web page, the services or activities they are authorized to offer by the CMF.