Chile Financial Market Commission relaxes promissory note requirement for non-resident checking-account overdrafts in Chilean pesos

The Chile Financial Market Commission issued a circular letter amending Chapter 8-1 of the Updated Compilation of Banking Regulations to facilitate access by non-resident, non-domiciled counterparties to overdrafts on checking accounts in Chilean pesos. The change is intended to reduce operational frictions for cross-border CLP activity by allowing banks to replace the promissory notes previously required to document agreed overdrafts when the beneficiary lacks residence and domicile in Chile. Under the new provisions, banks may put in place alternative instruments to support debt collection for these overdrafts, aligned with the requirements of the jurisdictions in which judicial collection must be pursued. Where beneficiaries have a risk rating equal to or higher than Chile’s and or are considered global systemically important banks, banks may make exceptions to the use of specific instruments and instead apply mechanisms consistent with their internal policies and risk appetite. The CMF framed the measure as the first regulatory amendment originating from its Market Development Committee and linked it to efforts to support the internationalization of the Chilean peso, improve price formation, increase market liquidity, and enhance supervisory effectiveness. The final regulation incorporates changes from the January 2025 public consultation and reflects the Chilean Internal Revenue Service’s Circular Letter No. 26, which set out a simplified process for non-resident, non-domiciled natural and legal persons to obtain a tax identification number. As a result, the CMF indicated that the originally contemplated amendment to Chapter 20-1 of the banking compilation was no longer warranted and published a regulatory report with core elements and an impact assessment alongside the new rule.