CMF Issues FAQs on Rule for Incorporating ESG Considerations at Banks
The Commission for the Financial Market (CMF) in Chile published multiple regulatory updates, including frequently asked questions (FAQs) on the recently issued General Rule No. 461, which incorporates sustainability and corporate governance aspects in the annual reports of supervised financial institutions. The rule aims to ensure that supervised entities report their policies, practices, and goals adopted with respect to the environmental, social, and governance (ESG) considerations. The rule applies to entities such as banks, insurance companies, issuers of publicly offered securities, general fund managers, and stock exchanges.
Additionally, CMF published consultation on the norm that establishes the requirements regarding commissions charged in money credit operations. The regulatory proposal establishes that any payment (direct or indirect) received or entitled to receive by the creditor, will be considered as interest in a money credit operation. However, in cases of payments that fall under certain specific conditions; these payments will be considered as commission and not as interest. The regulatory proposal will be in consultation until January 23, 2022. CMF also published a regulatory report that evaluates the impact of the proposal, along with the frequently asked questions (FAQ), a brochure, and a presentation on the proposal.
Press Release (in English and Spanish)
Comment Due Date: January 23, 2022
Keywords: Americas, Chile, Banking, Insurance, Securities, ESG, FAQ, Credit Risk, CMF
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Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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