Chile’s Financial Market Commission (CMF) issued a package of regulatory amendments to simplify and remove regulatory frictions affecting the repo and securitization markets, as part of its Market Development Agenda to support liquidity and deepen Chile’s fixed-income market. The changes are framed as a refinement of Basel III implementation in Chile and followed two public consultations, with a prior favorable agreement from the Board of the Central Bank of Chile. For repos, the regulation simplifies the approach to determining credit-risk capital requirements, including allowing transactions under a master agreement recognized by the Central Bank of Chile to receive risk weights as low as 10 percent, and potentially 0 percent for certain key counterparties or where trades are cleared and settled through CMF-recognized central counterparty entities. It also adjusts the calculation of the individual credit limit to reflect the transfer of ownership upon purchase. For securitizations, the CMF introduces the concept of significant risk transfer and sets criteria for when capital requirements should be calculated based on underlying assets versus retained securitized instruments, including eliminating the 1,250 percent credit risk weighting for bank-retained series; it also eases the process to register self-securitizations in the CMF’s Securities Registry and makes issuance requirements for transferable mortgage bonds more flexible. The CMF links the reforms to recommendations from the International Monetary Fund’s 2021 Financial Sector Assessment Program and published the regulation alongside a regulatory report covering key elements and impact assessment.
Chile Financial Market Commission 2026-04-13
Chile Financial Market Commission issues rules allowing repo risk weights down to 0 percent and removing 1,250 percent securitization charges
The Chile Financial Market Commission issued regulatory amendments to simplify repo and securitization markets under its Market Development Agenda and Basel III refinement, in coordination with the Central Bank of Chile. For repos, the rules streamline credit-risk capital requirements, allow lower risk weights for transactions under recognized master agreements or via central counterparties, and adjust individual credit limits to reflect ownership transfer. For securitizations, the CMF introduces a significant risk transfer framework, revises when capital is based on underlying assets versus retained instruments, removes the 1,250 percent risk weight for bank-retained series, eases registration of self-securitizations, and makes issuance requirements for transferable mortgage bonds more flexible.