The Commission for the Financial Market (CMF) in Chile published an updated version of the Compendium of Accounting Standards for banks, in addition to the adjustments to certain files of the Information System Manual for banks. The updated Compendium of Accounting Standards will be applicable from January 01, 2022. The updated version of the Compendium incorporates accounting information necessary to comply with the full implementation of Basel III standards and addresses situations arising from internal analysis as well as feedback received from stakeholders in the banking system.
After processing comments and suggestions received during the consultation period, CMF has adjusted the original regulatory proposal, mainly with respect to the application of the following International Financial Reporting Standards (IFRS):
- IFRS 9 on the accounting treatment of instruments eligible for additional tier 1 (AT1) and tier 2 (T2) capital
- IAS 8 on errors associated to operational risk events
- IAS 37 on determining operational risk provisions
Chapter B-1 of the Compendium of Accounting Standards on aggregate exposure for the group commercial portfolio has also been amended and a longer period has been proposed for its adoption independent of the first enforcement date of the new Compendium. Additionally, CMF issued a regulation on the limit control of loans that banks may grant to finance corporate groups. The last amendment to the General Banking Act, in force since January 12, 2019, originally set a limit of 30% of the effective assets of the creditor bank for the total of loans granted to individuals or entities belonging to the same corporate group. These amendments are contained in the new Chapter 12-16 of the Updated Compilation of Rules for Banks (RAN), which establishes the scope and exceptions for the application of loan limits to corporate groups. Also, a new file has been added to the Information Systems Manual for Banks to report monthly information on daily transactions carried out with entities belonging to the same corporate group, in addition to their identification and the amounts owed. CMF analyzed various concerns from different interested parties received during the regulation's public consultation period. The original regulatory proposal has been amended accordingly, with CMF also publishing a set of frequently asked questions to clarify these queries.
- Press Release on Compendium of Accounting Standards
- Compendium of Accounting Standards (PDF in Spanish)
- Press Release on Limit Control
Effective Date: January 01, 2022
Keywords: Americas, Chile, Banking, Credit Risk, Compendium of Accounting Standards, IFRS 9, Accounting, Operational Risk, Lending, Reporting, Basel, Regulatory Capital, CMF
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