The Chile Financial Market Commission (CMF) has issued a package of regulatory amendments to simplify the prudential and reporting treatment of repurchase agreements and securitizations, removing barriers that constrain liquidity and the development of Chile’s fixed-income market under its Market Development Agenda. The measures are presented as a refinement of Basel III implementation in Chile and were preceded by two public consultations and a prior favorable agreement by the Board of the Central Bank of Chile. For repos, the changes simplify how banks determine credit risk capital requirements and allow transactions under a master agreement recognized by the Central Bank of Chile to receive risk weights as low as 10 percent, potentially falling to 0 percent for certain key counterparties or where trades are cleared and settled through CMF-recognized central counterparty entities. For securitizations, the CMF introduces the concept of significant risk transfer and criteria for when capital requirements should be calculated on the underlying assets versus retained securitized instruments, eliminates the 1,250 percent risk weight previously applied to bank-retained series, eases registration of self-securitizations in the CMF Securities Registry, and makes issuance requirements for transferable mortgage bonds more flexible. The CMF has published the regulation and an accompanying regulatory report setting out key elements and an impact assessment in the Regulations section of its website.

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