Chile’s Financial Market Commission (CMF) launched a consultation on amendments to rules that bar banks from granting loans to their directors, general representatives and related parties. The proposal clarifies when lending to corporations falls within the prohibition and adds civil union partners under Civil Union Partnerships as equivalent to spouses for related-party purposes. The ban, set out in the General Banking Act and Chapter 12-12 of the Updated Compilation of Banking Regulations (RAN), covers direct and indirect lending to directors and general representatives and extends to spouses, minor children and corporations in which these persons participate. The framework allows the CMF to exclude corporations when shareholdings are below a specified percentage, and breaches can be sanctioned by an amount equal to the loan granted or any surplus value. To refine the exclusion scope, the amendments define the relevant corporations as those in which the covered persons or their related parties hold, directly or through one or more entities, more than 5% of equity or profits, and they also amend Chapter 12-4 of the RAN on limits for loans granted to related parties. The CMF has published the draft amendments and a regulatory report with an impact assessment on its website and is inviting feedback through its consultation section.
Chile Financial Market Commission 2025-01-23
Chile Financial Market Commission consults on changes to banks’ related-party lending ban including civil union partners and a 5% participation test
Chile’s Financial Market Commission (CMF) is consulting on amendments to rules prohibiting banks from lending to directors, general representatives, and related parties. The proposal clarifies lending restrictions to corporations and includes civil union partners as equivalent to spouses. Amendments refine the exclusion scope for corporations with less than 5% equity or profits held by covered persons or related parties.