CMF issues NCG on regulation of related parties operations among supervised entities

January 9, 2024

CMF issues NCG N°501 on operations with related parties of supervised entities

On January 8, 2024, the Financial Market Commission issued new regulations that establish the minimum mentions in the regularity and public dissemination policies of public limited and special companies registered in the Securities Registry. The provisions of General Standard No. 501 will come into force as of September 1, 2024.

What are the main guidelines of the issued standard?

The regulations address two main points regarding the content and establishment of the habituality policy of open corporations and special corporations and details the minimum matters that said policy must establish within the framework of Transactions with Related Parties.

The usual operations policy must contain:
Date of approval of the policy by the board of directors and date of the last modification.
Justification of the need to have a habitual policy considering the particular case of the company.
Characteristics and conditions that the operations must meet to be carried out under the habitual policy, indicating the reasons why each type of operation will be determined as ordinary in consideration of the business line; what will be the counterparties with which operations can be carried out; other restrictions that the board of directors may have determined; and, the maximum amount per operation so that the operation can be carried out within the framework of the habitual policy.
Control mechanisms to which the operations intended to be carried out or that have been carried out under the policy will be subject.
Person or body responsible for compliance with the control mechanisms indicated by the policy, including the circumstances that safeguard their independence of judgment.
Dissemination mechanisms.
Report on operations with related parties.

The standard establishes the duty to disseminate information; the aforementioned entities must prepare a semi-annual report of all operations with related parties and disseminate it on their website within the month following the semester they report in accordance with a standard digital format.

How will these regulations affect your company?

Contact us for personalized advice and more information about the changes you should implement.


Summary of the standard:

Usual operations policy:

Open and special corporations in their usual operations policies with related parties must consider the following matters:

Date of approval by the Board of Directors and its last modification, kept updated periodically.
Justification of the need to have the policy, explain and support the decision to adopt a habitual policy based on the specific characteristics of the entity.
Characteristics and conditions that the operations must meet to be carried out in accordance with the habitual policy, in which they must establish:
Identification and classification of counterparties in the entity’s operations, indicating them according to their nature and relationship with the company, with the controller or its administration, also establishing whether the usual operations can only be carried out with the parent company, subsidiary, affiliate or personal specific management, also indicating the subtype of operation that is considered usual (leases, commissions, etc.).
Determination of the maximum amount per operation. In addition to the limits established by Law 18,046, it is required to specify the maximum amount per operation, expressed as a proportion of the income, expenses, equity, assets or liabilities of the company, whether individually or consolidated. In cases where the amount exceeds certain percentages (1% of assets or 10% of income), the Board of Directors must justify this possibility.
Ordinary nature of the operations according to the company’s business. Politics can only include operations considered ordinary in relation to the social sphere. It is necessary to describe each type of operation established within the policy and explain why the board considers it contributes to the social sphere. Furthermore, to be considered ordinary, operations must meet certain requirements:
Terms and conditions similar to those above
Be recurring, held at least once every 18 months in the last three years or within the framework of successive contracts, deferred execution or automatic renewal.
Not have a relevant effect on the economic, financial or legal situation of the company. Some operations are considered to have a relevant effect, such as those carried out in the liquidation of assets that compromise the solvency of the entity or within the framework of a merger, and those that represent more than 30% of the income.