Chile: the Financial Market Commission (CMF) published in consultation the regulations governing the Open Finance System of the so-called Fintec Law

Andrea Alarcón F., Andrés de Iruarrizaga B.

Bofill Mir - On April 15, 2024, the Financial Market Commission (CMF) published for consultation the regulations governing the Open Finance System of the so-called Fintec Law (Law No. 21,521). The proposed regulation is available for comments until May 15, 2024.

CMF puts in public consultation the regulations governing the Open Finance System of the Fintec Law, applicable to Information Provider Institutions, Account Provider Institutions, Information Based Service Providers and Payment Initiation Service Providers.

On January 4, 2023, the Fintec Law was published, which "promotes competition and financial inclusion through innovation and technology in the provision of financial services" . Among others, this law establishes the basic rules and principles for the implementation of an Open Finance System (SFA) that allows the transfer and exchange of financial client information.

In this sense, the regulation in consultation identifies all the institutions participating in the SFA, for which the requirements that allow them to participate in the SFA according to the specific roles they have are dictated.

This includes entities currently supervised by the CMF and others that will be incorporated to the regulatory perimeter, as participants of the SFA.

It also establishes the mechanism for the exchange of data within the SFA (Application Programming Interfaces or APIs), the basic standards that will be applicable to the APIs, as well as the conditions that merit activating the use of an alternative mechanism for the exchange of data and the requirements regarding the quality of the information to be exchanged within the SFA.

This regulation is in addition to the regulation issued by the CMF on January 12 of this year, which regulates the registration, authorization and obligations of financial service providers (N.C.G. No. 502).

Scope of the regulation under consultation
The regulations submitted relate, among others, to the following matters:

- Registration and registration of Information Based Service Providers (ISPs) and Payment Initiation Service Providers (PISPs);
- Registration of Information Provider Institutions (IPI), Account Provider Institutions (IPC) and other entities participating in the SFA;
- Minimum standards associated with: (i) means of delivery and exchange of information; (ii) information security; and (iii) authentication and verification of clients and participating entities;
- Requirements applicable to the granting, recording and management of client consent;
- Data sets to be shared and exchanged in the SFA in accordance with the categories of information defined in the Fintec Law; and
- Instructions on gradual implementation of the SFA.

SFA Participating Institutions to which the regulations under consultation will apply
The institutions participating in the SFA will be those that qualify as Information Provider Institutions, Account Provider Institutions, Information Based Service Providers and Payment Initiation Service Providers, in accordance with Articles 18, 19 and 20 of the Fintec Law, all of which must be registered in the respective registers of the CMF.

- Information Provider Institutions (IPI);
- Account Provider Institutions (IPC);
- Information Based Service Providers (IBSP);
- Payment Initiation Service Providers (PSIP); and
- Other SFA participating entities.

These entities, in accordance with their particular role in the system, shall adopt the necessary measures to allow, as appropriate, the consultation, access, delivery and exchange of information, in an expeditious and secure manner.

IPI Payroll
All entities considered as IPI will have to submit the background information that allows them to prove compliance with the requirements of the Fintec Law, and will be obliged to be included in a list of entities called "Nómina IPI" (IPI List). Entities considered IPI (article 18 of the Fintec Law):

- Banks and issuers of credit cards, payment cards with provision of funds or any other system similar to the referred means of payment that are authorized by the CMF ;
- Payment card operators authorized by the CMF;
- Savings and credit cooperatives supervised by the CMF, governed by the General Law of Cooperatives;
- Agents managing endorsable mortgage loans and insurance companies regulated under DFL No. 251 of 1931 of the Ministry of Finance;
- Institutions that place funds through massive money lending operations (article 31 of Law No. 18,010);
- General fund managers and portfolio managers regulated under Law No. 20,712, on the administration of third-party funds;
- Brokerage firms regulated by Law No. 18,045 on the Securities Market; - Family Allowance Compensation Funds regulated by Law No. 18,833;
- Entities registered in the CMF’s Registry of Financial Service Providers; and
- Other financial institutions supervised by the CMF, as determined by the CMF by means of a general rule.

Deadlines for incorporation to the IPI Payroll
The IPIs obliged by law to share and exchange information in the SFA, as well as the IPCs obliged to send and exchange information regarding payment orders, must prove compliance with the requirements and request their inclusion in the IPI Payroll and the IPC Payroll, as appropriate, in accordance with the following deadlines:

- Banks and issuers of credit cards, payment cards with provision of funds or any other system similar to the referred means of payment that are authorized by the CMF: They must submit their request within the first 90 days of the entry into force of the rule in consultation; and.

- Other IPIs listed in the second paragraph of article 18 of the Fintec Law (letters (a) to (h)): They must submit their application within 18 months after the entry into force of the rule under consultation.

Deadlines for SFA implementation
The SFA will have a two-stage implementation period.

- Stage 1, a period of 18 months from the publication of the regulation for the technological preparation and development of the tasks that correspond to the participants and the CMF; and

- Stage 2, implementation of the information systems (APIs):

• Banks, credit card issuers and issuers of payment cards with provision of funds:

                a) 6 months for implementation of APIs on Attention Channels.
                b) 12 months for implementation of APIs on General Terms and Conditions.
                c) 15 months for implementation of APIs on Commercial Terms and Conditions and product usage and history.
                d) 18 months to implement APIs on Payment Initiation.

• Entities indicated in the second paragraph, letters (a) to (h) of article 18 of the Fintec Law:

                a) 24 months for implementation of APIs on customer service channels and general terms and conditions.
                b) 36 months for implementation of APIs on commercial conditions and product use and history.

Validity
The provisions incorporated in the regulation will enter into force and become enforceable after 18 months from its enactment.


Authors:
Andrea Alarcón F. - Director, Capital Markets
Andrés de Iruarrizaga B. - Associate, Corporate

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