Legal Alert/ Law 21.276 to ensure the proper functioning of the financial market

Friday October 30th, 2020

On October 19, 2020, was published in the Official Gazette the Law No. 21,276 (Amendment), to protect the proper functioning of the financial market and which amended, among others, (a) Decree Law No. 3,500 on Pension Fund Administrators (DL 3,500); (b) Law No. 18,045 on the Securities Market (LMV); and (c) Law No. 18,046 on Corporations (LSA).

A. Modifications to DL 3.500.

Concerning DL 3,500, the Modification increased the range within which the Central Bank of Chile can establish the maximum limit for the investment of Pension Funds in alternative assets, from a maximum of 15%, to 20%. Currently, the limits established by the Central Bank are:

Pension Fund Alternative Assets Limit
Fund A 13%
Fund B 11%
Fund C 9%
Fund D 6%
Fund E 5%

 

B. Amendments to the Securities Market Law.

The automatic registration of debt securities (bonds or trade bills) issued by (a) issuers already registered in the Securities Registry maintained by the Financial Market Commission (CMF), and (b) that comply with the characteristics and conditions established by the CMF through a general rule, is incorporated in the LMV

C. Amendments to the Law on Corporations.

Regarding to the ASL, the Amendment:

(a) Authorizes the waiver of the preferential right of the shareholders to subscribe shares, debentures convertible into shares of the issuing company, and any other security that confers future rights over the shares of the issuer (i) at the same shareholders’ meeting in which the respective issue is agreed upon, or (ii) in the form and conditions determined by the Regulations on Corporations.

(b) Modifies the period of notice for the publication of the notices in the meeting of shareholders and their communication to the CMF, which must be made at least 10 days before the date of the respective meeting.

(c) In open corporations, it eliminates the obligation to send a summons by mail to the shareholders, replacing it with an obligation to broadcast the meeting in the manner determined by the CMF through a general rule.

More information, contact Matías Langevin mlangevin@hdycia.cl o a Carolina Philipps cphilipps@hdycia.cl .