/ CMF regulates minimum content of so called customary transaction policies and regulates public disclosure of related party transactions

Felipe Cousiño
Partner

Francisca Donoso
Associate Attorney

On January 8, 2024, the Financial Market Commission (CMF) issued General Applicability Rule No. 501 (NCG), which establishes the minimum mentions of the customary transaction policies, and regulates the public disclosure of related party transactions that have been carried out by public and special corporations.

This NCG regulates two issues. First, the minimum requirements that must be met by the customary transaction policy (Policy or Policies) approved by the board of directors of public or special corporations, so that they do not have to meet the requirements and procedures indicated in Article 147 of Law 18,046. Secondly, it regulates the requirements of the half-yearly record of transactions with related parties entered into during the relevant semester (Report), which must be disclosed by public and special corporations, regardless of whether they have been carried out under the customary transaction policy referred to in the first part of this paragraph.

Customary transaction policy

The policies must meet the following requirements:

• Date of approval of the policy by the board of directors and of the last modification thereof.
• Justification of the need to have a policy.
• Characteristics and conditions to be met by the transactions to be carried out under the policy (counterparties, maximum amount per operation and ordinary nature of the operation).
• Control mechanisms to which the operations carried out under the policy will be subject.
• Appointment of an independent compliance officer, who shall be responsible for verifying the correct functioning of the control mechanisms indicated by the policy and reporting to the board of directors.
• Mechanisms for dissemination of the policy.

Reporting of related party transactions

The NCG indicates the information that must be included in the report, which must conform to the template indicated in the annex to the NCG.

The report must also be published on the company’s website and be available for consultation by shareholders at its corporate offices within the month following the six-month period reported. Each report must remain available to the public in these media for at least 24 months from its publication.

The reporting obligation does not exempt the company from reporting as a material fact those transactions that should be reported as a material fact. Likewise, the reporting obligation does not apply to transactions subject to secrecy or confidentiality, but such transactions with related parties must be included in the Report immediately following the six-month period in which the reason for secrecy or confidentiality was lost.

Validity

The provisions contained in the NCG shall become effective as of September 1, 2024.

The entities that have customary policies must adapt them to the provisions of this regulation.

Said policies shall be approved by the relevant boards of directors and made available to the public no later than August 30, 2024. The adjustments made to the customary policies shall be in force at the time of the entry into force of this regulation.

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To access the text of the published NCG click here.

For more information regarding the NCG, please contact Felipe Cousiño (fcousiño@alessandri.cl) or Francisca Donoso (fdonoso@alessandri.cl).