/ Intellectual Property in the Fintech Market: Public Information and its Relevance

The tools and operational aspects of fintech companies are protected by intellectual and industrial property laws. The information that the players in this new technological financial market publish must be limited to that which is strictly necessary for clients to make informed decisions on the expected results of the services contracted.

Jaime Urzúa W.
Associate
Alessandri Abogados

As part of the operational rules that the Financial Market Commission (CMF) must establish under Law 21,521, which promotes competition and financial inclusion through innovation and technology in the provision of financial services (known as the Fintech Law), the agency has convened a series of consultative roundtables. At these tables, the CMF receives opinions from stakeholders and experts in order to advance a public, participatory and transparent regulatory development process.

One of the roundtables focused on the issue of the public information obligations to which fintech companies must be subject, i.e., what information they must disclose and keep available for public consultation.

The CMF proposed a series of general guidelines based on the premise that the information disclosed must be understandable, timely and standardized. Based on this, the agency followed the classification established by the Fintech Law of the various players in this market, considering both the nature of the services provided by each of them and the category of their clients (whether retail, qualified or institutional).

During the technical roundtable, one of the main issues raised, especially for credit or investment advisors, was the need to inform the public about the methods used to profile clients, assess risks and make recommendations. These firms rely on the construction of robust statistical models that allow, among other things, the analysis of clients’ risk appetite, their investor profile and their wealth, in order to offer them the most appropriate financial products for their situation.

Given that the services of these companies will be almost entirely automated and provided through algorithms and robot advisors, doubts arose as to the depth of the mandatory information to be reported, considering the value of the intellectual property associated with such models or algorithms.

The tools used by fintech companies are intellectual works protected by the copyrights recognized in Law 17,336 on Intellectual Property. Likewise, the aspects related to the operational configuration of these works may constitute business secrets protected by Law 19,039 on Industrial Property.

Consequently, the CMF must take into account that the methods used for the provision of services are protected by law to encourage innovation and stimulate knowledge-based competition. The information published by the players in this new technological financial market should be limited to that which is strictly necessary for clients to make informed decisions on the expected results of the services contracted. This will serve to safeguard the information assets of these companies, while promoting technological development in the financial market and protecting customers in their role as consumers of this type of products.