Financial Markets Commission

Transcription

1 Financial Markets Commission Chilean securities and insurance landscape and regulatory roadmap Joaquín Cortez September 7th,

2 Chilean Financial Market

3 Chilean Financial Market Participants and Regulatory Framework Financial System Regulators Central Bank Banks and Financial Inst. Superintendence Financial Market Commission Pension Funds Superintendence CEF Credit Suppliers Banks Cooperatives Credit Card Issuers Leasing and Factoring Securities and Commodities Intermediaries Banks Securities Brokers Securities Agents Securities Issuers Chilean or Foreign entities Corporations Mutual and Investment Funds Insurance Companies Institutional Investors General Fund Managers Portfolio Managers Insurance Companies Pension Funds Managers AFC Other credit suppliers not supervised by the SBIF Portfolio Managers not supervised by the CMF Financial infrastructure Stock and Commodities Exchanges DCV CCLV Combanc SAG Comder LBTR Gatekeepers: External Audit Providers Credit risk rating providers

4 Chilean Financial Market Assets under management Financial System Assets (USD Bn) Pension Funds Insurance Companies Mutual Funds Investment Funds Banks Source: Financial Markets Commission (CMF), SBIF, Central Bank of Chile

5 Chilean Financial Market Assets under management 160% 140% 120% 100% 80% 60% 40% 20% 0% 94% 96% 94% 90% 89% 89% 86% 95% Financial System Assets (% of GDP) 110% 112% 108% 114% 120% 128% 122% 128% 62% 62% 58% 60% 62% 68% 69% 69% 72% 71% 49% 52% 53% 56% 56% 56% 57% 61% 50% 17% 19% 20% 21% 20% 19% 18% 18% 20% 20% 19% 19% 21% 21% 22% 23% 24% 24% 24% 6% 8% 10% 10% 11% 10% 12% 13% 12% 18% 16% 14% 14% 15% 18% 18% 18% 19% 20% 2% 2% 2% 2% 2% 2% 3% 4% 3% 4% 4% 4% 4% 4% 4% 5% 7% 9% 9% 136% 123% 126% Pension Funds Insurance Companies Mutual Funds Investment Funds Banks Source: Financial Markets Commission (CMF), SBIF, Central Bank of Chile

6 What is the Financial Markets Commission? The Financial Market Commission (CMF) is the public organism in charge of regulating and supervising the entities participating and the activities developed in the securities and insurance markets in Chile Ensure the sound functioning of the financial system Mandate Financial stability and systemic risk supervision Strategic Goals Capital market development Reduce the information asymmetry for the decision making process Raise the market conduct standards Promote the effective risk management by supervised entities Develop conditions to enhance financial inclusion Strengthen the institutional management 10

7 What is the Financial Markets Commission? The board of the CMF is an independent and collegiate body Supervision Regulation Enforcement Capital Markets Development Supervision of compliance with laws, regulation and administrative rulings. Issue regulatory norms or rulings Regulatory modeling Regulatory impact analysis Public consultation Independent prosecutor office The prosecutor has additional enforcement tools Informant and leniency program After a due process, the board can impose sanctions Promote initiatives for markets development Support initiatives for product development, instruments and their promotion 11

8 Market Infrastructure Intermediaries Securities Issuers Funds & Asset Managers Rating agencies & auditors Life insurance General insurance Brokerage and Adjuster Supervisory Perimeter Financial Market Comission (CMF) Securities Insurance 12

9 Our focus so far Transition from the SVS to the CMF Widening of investment limits for insurance companies Simplified sanction process & informant leniency programs Regional integration and funds passport Formalize IOSCO principles for financial market infrastructure Increase asset eligibility for voluntary pension savings 13

10 Risk Based Supervision for Insurance Companies Roadmap Fintech Law and Regulation Capital Markets Development and Modernization 14

11 Risk-Based Supervision for Insurance Companies Strengthening Insurance Companies Risk Management Processes Capital requirements based on insurer s risks under total balance approach (CBR) Implementation and regulation is handed to the Supervisory Authority (CMF) Enhance regulator s supervisory attributions Additional tools to adopt preventive supervision and early corrective measures Supervision based on an enhanced system of solvency assessments (capital adequacy & net risk) Greater flexibility for insurance companies to determine their own business model More flexible investment regime, removing most limits on investment assets due to CBR Increase competitiveness of local industry by the convergence to international standards (IAIS, OCDE, FSB) 15

12 Fintech What are we thinking? How to Foster Growth and Innovation in the Financial Sector Technological Neutrality Proportionality Regulations by function not by entity Equivalent regulation to traditional services that are technology intensive Increase competition by imposing similar standards to similar services and products Modernization of current regulatory requirements Requirements proportional to risks involved Regulatory sandbox for newly developed business models Platforms Securities Exchanges Alternative trading systems Crowdfunding platforms Custody Cryptocurrencies Tokens Securities Others Robo-advisors Scoring 16

13 Capital Markets Development and Modernization Modernizing Regulation and Supervision Corporate Governance Market Depth and Liquidity Regional Integration Strengthening Supervision Improve the Best Practices Code (NCG 385) to include international standards and ESG considerations Enhance information on companies sustainability practices (NCG 386) Modernization of Market Maker requirements (NCG 327) for a security to be determined as liquid Reviewing standards of minimum offer, contract duration, amount traded and number of days with trades Making the Funds Passport Initiative work to facilitate the commercialization of funds in Latam Joint work with Colombia, Mexico and Peru Conversations with Argentina regarding securities Enhance risk-based supervision methodologies for insurance, intermediaries and market infrastructure Reinforce supervision teams with an emphasis on operational risk 17

14 Financial Markets Commission Chilean securities and insurance landscape and regulatory roadmap Joaquín Cortez September 7th,