CHILE Law and Practice Contributed by: Felipe Díaz Toro, Victor Riadi and Ignacio Ruiz Rodríguez, EDN Abogados
2.3.4 Regulatory Approval Process According to the LUF, the fund manager has a maximum of 180 days to begin marketing the fund, counted from the filing of the respective by-laws. Given that the CMF may present objec - tions or observations to the by-laws of FIs or other documentation submitted in relation to each new investment fund, as described in 2.2.2 Legal Structures Used by Fund Managers , the revision of these documents may be prolonged. 2.3.5 Rules Concerning Pre-Marketing of Alternative Funds With the exception of rules established for the private offerings of FIPs (as explained below), there are no pre-marketing provisions contained in local regulations for alternative funds. Units would be classified as a security in Chile. Active and/or passive marketing of funds is per - mitted, provided that an exemption to the pub - lic offering registration requirement is complied with. An offer is not a public offering and can be offered without prior registration where it is exclusively and privately targeted to a certain type of investors (institutional investors). On the contrary, any public offering of securities (which includes fund units) must be preceded by the registration with the CMF of both the issuer and the securities or class of securities being offered. The public marketing and selling of fund units in Chile requires registration of the fund and its units with the CMF. The selling and intermedia - tion of fund units in Chile requires the appropri - ate brokerage licence, as fund units fall within the meaning of “securities” under the Securities Market Law. For the purposes of this exemption, an offering will be held to be exclusively and privately con - ducted if it is aimed at certain eligible investors
a fund auditor from among those registered in the CMF Register of External Auditing Entities. Pursuant to CMF Circular Letters No 657 of 2011 and No 592 of 2010, if the fund’s by-laws per - mit payment in kind (of units), the fund manager must appoint an independent valuator. A similar appointment must be made for the valuation of alternative assets. As fund service providers have gained further specialisation, fund managers have increasingly outsourced a broader scope of services, includ - ing compliance services, IT providers, invest - ment brochures or prospectus design services, and investor services platforms, which generally are not subject to licensing or authorisation. It is important to note that, despite the outsourc - ing of these tasks and services, the fund man - ager’s liability for the management of the fund is non-delegable, as stated in Article 15 of the LUF. Consequently, clauses that limit the responsibil - ity of the fund manager for the actions of out - sourced service providers are not enforceable against third parties. 2.3.3 Local Regulatory Requirements for Non- Local Managers Under Chilean regulation, fund managers are the default providers of both fund administration and fund management. As mentioned in 2.2.2 Legal Structures Used by Fund Managers , all Chilean fund managers must be domiciled in Chile. However, the LUF allows for the outsourcing of some tasks and responsibilities to an external manager, either local or foreign, as long as the extent of such activities and the costs involved are established in the fund’s by-laws.
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