CHILE Trends and Developments Contributed by: Felipe Díaz Toro, Victor Riadi and Ignacio Ruiz Rodríguez, EDN Abogados
es differentiated criteria based on the type and volume of operations conducted by administra - tors, dividing them into two categories: • Block 1: Managers with fewer than 50 non- institutional clients and without the charac - teristics of Block 2 are exempt from minimum equity requirements. • Block 2: Managers with more than 50 cli - ents, at least one institutional client, or those exceeding specific thresholds for assets under management or income are required to maintain a minimum equity of 5,000 UF or 3% of their risk-weighted assets, in addition to adjustable guarantees for the benefit of the funds they manage. The regulation introduces a more advanced methodology for calculating risk-weighted assets, accounting for operational, credit, and market risks, including specific classifications for crypto-assets. The implementation of NCG 526 will be mandatory as of 1 January 2026, while provisions related to risk management will come into effect on 1 July 2027. Managers must assess their classification and adapt their opera - tions to meet these new regulatory standards. On the same date, the CMF issued General Rule No 527 (NCG 527), introducing significant changes to NCG No 507 on corporate govern - ance and risk management, as well as NCG No 468, which governs the authorisation of gen - eral fund managers’ functions. This regulation includes a new section on the risk management quality assessment, allowing the CMF to evalu - ate the effectiveness of fund managers’ con - trols, policies, and procedures. The assessment considers risks such as credit, market, liquidity, operational, money laundering, and conduct. Fund managers will be rated on a global scale based on their compliance, identifying areas for
improvement in governance and risk manage - ment. Additionally, NCG 527 mandates an annual risk management self-assessment, which must be approved by the board of directors and submit - ted to the CMF within 30 days after the end of each financial year. This self-assessment must address compliance with regulations related to organisation, internal controls, and risk mitiga - tion. NCG 527 applies immediately, except for the self-assessment provisions, which will become According to the Central Bank of Chile, inflation in 2024 exceeded earlier projections. The annual variation of the consumer price index (CPI) stood at 4.2% in November 2024 and was expected to close the year at 4.8%, fluctuating around 5% during the first half of 2025. This higher-than- expected inflation trajectory in the short term is attributed to a combination of cost pressures. One contributing factor is the global apprecia - tion of the US dollar, driven by heightened global uncertainty, which has increased the exchange rate. Additionally, rising local labour costs have exerted upward pressure on inflation. These shocks have occurred simultaneously, narrowing companies’ operating margins and resulting in a higher pass-through to final prices than previ - ously anticipated. In the medium term, cost pressures are expect - ed to ease, and the evolution of inflation will depend on domestic demand, particularly household consumption. Household consump - tion remained relatively flat during the second mandatory as of 1 July 2027. Market and economic context Exchange rate and economic stability
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