CHILE Law and Practice Contributed by: Alvaro Moraga Fritz and Sebastián Moraga Nazar, Moraga & Cía.
the solvency and integrity requirements outlined in Article 28 of the LGB. The receipt of the appli - cation will be publicly disclosed. The CMF has 180 days to review the documenta - tion and may either issue a provisional authorisa - tion certificate or reject the prospectus through a reasoned decision. This period may be extended by an additional 180 days in specific cases. Upon issuance of the provisional authorisation certificate, the shareholders must establish a guarantee equivalent to 10% of the projected capital. The minimum capital for a bank is the equivalent of 800,000 units of account ( unidades de fomento ). The provisional authorisation certificate is valid for ten months and grants legal personality to the company in formation. Within the ten-month period from the issuance of the provisional certificate, the company must execute the public deed of incorporation along with the bank’s by-laws, which must be approved by the CMF. These by-laws must incorporate the provisions of Article 42 of the LGB and those relevant to the Stock Corporations Law (LSA). After obtaining authorisation for existence, the company may apply to the CMF for operational authorisation. The CMF will, within 90 days, assess whether the new entity is prepared to commence opera - tions. This process includes evaluating the pro - fessional and technological resources, as well as the procedures and controls in place to ensure adequate performance. Furthermore, the CMF will conduct a final review of the business devel - opment plan for the first three years of opera - tion. Once these conditions are met, the CMF
will issue an operating authorisation within 30 days and set a maximum period of one year for the institution to commence operations. With the operating authorisation granted, the institution will be permitted to begin its activities. Article 40 of the LGB defines banking operations as activities related to the regular collection or receipt of money or funds from the public, for the purpose of: • lending; • discounting documents; • making investments; • engaging in financial intermediation; • generating returns from such funds; and • generally, conducting any other operation permitted by law. In turn, Article 69 of the LGB specifies the par - ticular operations that banks are authorised to undertake, including (among many others): • receiving deposits; • executing transactions; • granting loans; • providing safe deposit boxes; and • offering financial advisory services. All these operations must be carried out in strict compliance with the sectoral regulations issued by the CMF and the Central Bank. Banks are permitted to operate only within the scope explicitly outlined by the LGB, and any activity outside this scope is prohibited. Addi - tionally, the legislation imposes specific obliga - tions and restrictions in areas such as: • information disclosure; • banking secrecy; • investment and capital limits;
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