On 31 August 2020, the commission for the financial market published a new regulation in consultation on a project (“Proposal”) which seeks to authorize technological means for holding board meetings, in order to modernize the current regulation, especially in the face of the current situation as a result of the Covid-19 pandemic.
Law 19.705 of 2000 modified, among other matters, the Law on Corporations, authorizing the participation of directors through technological means authorized by the CMF. In this way, Circular Nº 1.530 of 2001 was issued authorizing telephone and video conferencing, establishing requirements that had to be fulfilled previously for their use.
In April 2020, the CMF issued Circular No. 1.149 which clarified the scope of Circular No. 1530, stating that in no case should it be understood as a limitation to the authorization granted by law so that every one of the company’s directors may participate in the board meetings simultaneously and permanently by technological means that meet those conditions.
The Proposal repeals and improves the scope of Circular No. 1530 and authorizes remote participation in directory sessions, any system of two-way transmission and reception of sounds, images, or information that allows directors to interact in real-time, simultaneously and permanently.
The Proposal considers as systems approved for this purpose:
• Video conferencing systems, such as (i) Zoom by Zoom Video Communications; (ii) Teams and Skype by Microsoft, (iii) Webex Meetings by Cisco Systems, (iv) Hangouts, Meet and Duo by Google, (v) the tool that allows video conferencing in Apple’s FaceTime application and (vi) WhatsApp by Facebook, among others;
• Voice over data communication systems, such as (i) the tool that allows calls through the Facebook application WhatsApp Voice Call; (ii) WeChat from Tencent, (iii) Telegram from Telegram (iv) FZ-LLC and Line from Line Corporation, among others;
• Traditional voice communication systems, i.e. those provided by fixed or mobile telephone telecommunication companies.
Likewise, the Proposal contemplates innovations concerning the rules that must be complied with to give strict compliance with the rules of the Law on Corporations and its Regulations, such as:
• every corporation must have a mechanism that allows directors to use their right to attend board meetings remotely and free of charge;
• the general manager must communicate in advance the form and timetables in which the mechanisms employed will be available, and must provide them with the information and documents necessary to deliberate and define the matters to be dealt with at the respective meeting. The foregoing is in addition to the requirements already in force that correspond to (i) the certification of the Chairman and the Secretary of the Board of Directors indicating that the directors attended and participated, being communicated throughout the session simultaneously and permanently, and the identity of those who used said mechanisms; (ii) to record in the minutes said certification; and (iii) that the deliberations and agreements must be recorded in minutes stored in means that guarantee their fidelity and integrity, raised by all the directors who attended the session.
The deadline for comments on the Proposal is 21 September 2020.
For more information contact Matías Langevin firstname.lastname@example.org