CHILE Law and Practice Contributed by: Alberto Alcalde, María Catalina Zegers García-Huidobro and Pía Robledo, Puga Ortiz
Other Vendors Vendors providing software, cloud services and cyber - security solutions (technology providers) play a critical role in ensuring compliance with technical standards. Vendors must meet security and operational stand - ards set by the CMF, particularly for systems handling sensitive financial data. Fintech providers often use third-party application programming interfaces (APIs) and cloud services, which may require additional scrutiny to ensure com - pliance. Fintech providers often engage with industry bod - ies to stay up to date with trends and collaborate on compliance strategies. Legacy players may have less reliance on industry bodies due to their established regulatory frameworks. 2.13 Conjunction of Unregulated and Regulated Products and Services The law explicitly addresses the regulation of finan - cial services and provides clear guidelines for industry participants offering regulated products and services. Entities providing regulated services are generally required to maintain as their sole and exclusive corpo - rate purpose the provision of such services. However, General Rule No 524 introduced specific exceptions to this requirement for entities providing only investment advisory, credit advisory, alternative trading systems or crowdfunding services, provided that their services in Chile are directed exclusively to qualified investors (as defined in Article 4 bis of Law No 18.045). Fintech providers often establish separate legal enti - ties to offer unregulated services, ensuring compli - ance with regulatory requirements while diversifying their offerings. Fintech providers must ensure clear separation between regulated and unregulated services to avoid regulatory scrutiny. 2.14 Impact of AML and Sanctions Rules AML and sanctions compliance are critical compo - nents of the Chilean financial regulatory framework,
impacting both regulated and, in certain cases, unreg - ulated fintech companies. AML obligations derive primarily from Law No 19.913, which created the UAF and established Chile’s AML/ CFT framework. Under this regime, reporting entities must implement adequate governance, risk manage - ment and internal control policies to prevent money laundering and terrorism financing. Fintech companies offering regulated services are subject to AML and sanctions rules applicable to their activities. Reporting obligations to the UAF are mandatory where transactions may involve suspicious activities, and entities must conduct customer due diligence and maintain monitoring systems propor - tionate to their risk profile. Regulated fintech companies often adopt advanced technological tools (eg, AI-driven transaction moni - toring systems) to enhance compliance efficiency. Compliance with AML rules is generally viewed as a competitive advantage, strengthening trust among clients, counterparties and investors. The CMF and the UAF have broad supervisory and enforcement powers to monitor compliance, conduct investigations and impose administrative sanctions. Severe penalties, including cancellation of registration and potential criminal liability, may apply to entities failing to meet AML requirements. 2.15 Financial Action Task Force (FATF) Standards Chile’s AML/CTF framework aligns with FATF stand - ards through its focus on risk-based compliance, cus - tomer due diligence and reporting obligations. This alignment ensures that fintech companies operating in Chile adhere to internationally recognised best prac - tices for combating money laundering and terrorism financing. 2.16 Reverse Solicitation Cross-Border Offering of Regulated Services Foreign entities providing regulated services in Chile must establish either a locally incorporated company or a registered agency in the country, unless they qualify under the simplified regime applicable to ser -
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