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FinTechs belonging to this category offer advisory and broking services for investments usually via an internet platform.
Robo advisory services usually offer an investment proposition following a series of questions concerning the personal financial background and the risk-bearing capacity of the user. Sometimes the respective platform also enables the user to directly execute the proposed investment.
Auto-trading concerns all services which automatically trade on behalf of the customer according to his or her specifications.
Apart from that some FinTechs collect and offer merely or as an ancillary service market information or operate comparison portals to increase the transparency of the capital markets and to help the investor with his decision-making.
There are also FinTech-advertising-services which advertise various financial services or products.
Introduction
Attitude of the country towards modern financial advisory and broking services
Regarding the social and political climate, we are not aware of any noteworthy discussions on the subject apart for the enactment of FinTech Law. However, we note that these types of services are becoming increasingly common and banks and other financial agents have incorporated them into their platforms and systems.
In Chile, within the robo-advisors industry, the following FinTechs are noteworthy: SoyFocus, Clever, Fintual Chile, Betterplan and Holdo.
Legal affairs
Obligations and requirements to provide financial advisory and broking services, or ancillary services described above
Technology has blurred the limits between rendering financial advice and portfolio management (since, for instance, certain applications may automatically recommend investments and allow the customer to choose by clicking on his or her device). Both services have been regulated by the FinTech Law, with different requirements, but in any case, in order to provide these services must be registered in the RFSP. Thus, it is very important to distinguish between both in order to comply with these new regulations.
If the scope of the consulting, broking and auto-trading services extends to intermediation of securities, the entity shall establish itself in Chile either as a securities broker and/or securities agent under the oversight of the CMF and shall fulfil certain specific requirements such as minimum capital and solvency requirements.
FinTech Law establishes that for an entity to be enrolled in the RFSP, it must comply with the requirements of Article 7, which are different depending on the specific service (credit advisory, investment advisory or broking services).
Also, people who work for companies that provide financial advisory services enrolled in the RFSP must comply with objectivity, coherence, and consistency standards between their recommendations and/or evaluations and the client´s actual needs. Same applies to the systems used by these companies. These standards are established by the CMF.
Regarding information obligations, please see above section b. ii.
With the Fintech Law, entities that provide intermediation services are now regulated by the CMF.