Consolidated TPP Text – Annex III – Schedule of Chile

1. The Chilean financial services sector is partially compartmentalised, that is to say the institutions, domestic and foreign, authorised to operate as banks may not participate directly in the insurance and securities business and vice versa. However, subject to authorisation from the Superintendence of Banks and Financial Institutions (Superintendencia de Bancos e Instituciones Financieras, SBIF), domestic and foreign banks operating in Chile may set up subsidiaries, to supply other financial services in addition to their main line of business.

2. Chile reserves the right to adopt measures to regulate financial conglomerates, including the entities forming part of it.

3. The term “CPC” means the Provisional Central Product Classification (Statistical paper Series M, No. 77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York (1991)).

• (a) Core banking services and bank operations:
  • acceptance of deposits (includes only current bank accounts (cuentas corrientes bancarias), sight deposits, time deposits, savings accounts, financial instruments with repurchase agreements, and warranty deposits or surety bonds);
  • credit granting (includes only ordinary loans, consumer credit, loans in letters of credit, mortgage loans, mortgage loans in letters of credit, purchase of financial instruments with resale agreements, credit for issue of bank surety bonds or other types of financing, issue and negotiation of letters of credit for imports and exports, issue and confirmation of stand-by letters of credit);
  • purchase of publicly-offered securities (includes only purchase of bonds, purchase of letters of credit, subscription and placement as agents of shares, bonds and letters of credit (underwriting));
  • issue and operation of credit cards (CPC 81133) (includes only credit cards issued in Chile);
  • issue and operation of debit cards;
  • travellers’ cheques;
  • transfer of funds (bank drafts);
  • discounting or acquisition of bills of exchange and promissory notes;
  • endorsement and guarantee of third party liabilities in Chilean currency and foreign currency;
  • securities custody;
  • exchange market operations carried out according to the regulations issued or to be issued by the Central Bank of Chile;
  • operations with derivatives authorised or to be authorised by the Central Bank of Chile (includes only forwards and swaps of currency and interest rate); and
  • acceptance and execution of fiduciary operations.

Foreign banking institutions must be banking companies (sociedades bancarias) legally constituted in their country of origin and must put up the capital required by Chilean law.

Foreign banking institutions may only operate:

• (a) through shareholdings in Chilean banks established as corporations in Chile;
• (b) by becoming established as a corporation in Chile;
• (c) as branches of foreign corporations, in which case the legal personality in the country of origin is recognised. For the purposes of foreign bank branch operations in Chile, the capital effectively invested in Chile is considered, and not that of the main office. The increases of capital or reserves that do not come from capitalisation of other reserves, will have the same treatment as the initial capital and reserves. In the transactions between a branch and its main office abroad, both will be considered as independent entities.

No national or foreign, natural or legal, person may acquire directly or through third parties shares in a bank which, alone or added to the shares such a person already possesses, represent more than 10 per cent of the bank’s capital without having first obtained the authorisation of the SBIF. In addition, the partners or shareholders of a financial institution may not transfer a percentage of rights or shares in their company in excess of 10 per cent without having obtained authorisation from the SBIF.

(i) Financial leasing (CPC 81120) (includes only leasing contracts for goods acquired at the client's request, i.e. they cannot acquire goods in order to stock them and offer them for leasing).

(ii) Factoring.

(v) Securitisation

(vi) Intermediation of publicly offered securities (CPC 81321).

Banks can provide securitisation services through subsidiaries as established in the General Banking Act. In order to provide these services, bank subsidiaries must comply with the securities laws and the norms issued by the SVS. Prior authorisation from both the SVS and the SBIF is required.

Banks can provide the services of intermediation of publicly offered securities through subsidiaries as established in the General Banking Act, either as securities agents or as stockbrokers. Except for the requirement to enrol in the relevant register of the SVS, in order to provide these services bank subsidiaries must comply with the securities laws and the norms issued by the SVS. Prior authorisation from both the SVS and the SBIF is required.

1. In Chile, the insurance business is divided into two groups: the first group comprises companies that insure goods or property (patrimonio) against the risk of loss or damage, while the second comprises those that cover personal risks or guarantee, within or at the end of a certain term, a capital sum, a paid-up policy or an income for the insured or his/her beneficiaries. The same insurance company may not be constituted in such a way as to cover both categories of risk.

2. Credit insurance companies, even though classified in the first group, must be established as legal entities with the sole purpose of covering this type of risk, i.e. loss of or damage to the goods or property (patrimonio) of the insured as a result of the non-payment of a money debt or loan, being also permitted to cover guarantee and fidelity risks.

Insurance:

Sale of direct life insurance (does not include insurance related to the social security system) (CPC 81211), and sale of direct general insurance (CPC 8129, except for CPC 81299) (excluding the social security health institutions(Instituciones de Salud Previsional, ISAPRES)) i.e. legal persons set up for the purpose of providing health benefits to persons who opt to become members and financed through the statutory contribution of a percentage of taxable income fixed by law or a higher amount, as the case may be. It also excludes the National Health Fund (Fondo Nacional de Salud, FONASA), a public agency financed by the government and the statutory contribution of a percentage of taxable income fixed by law, which is jointly responsible for paying benefits under the optional health scheme which persons not members of an ISAPRE may join.

(Does not include sale of insurance for international maritime shipping, international commercial aviation and space launching and freight (including satellites) and goods in international transit).

Insurance services can be provided only by insurance companies established in Chile as corporations or as branches of foreign corporations with the sole purpose of developing this line of business, either direct life insurance or direct general insurance. In the case of general credit insurance (CPC 81296), they must be established as corporations or branches with the sole purpose of covering this type of risk.

Insurance corporations can be legally constituted only in accordance with the provisions of the law on corporations.

For the purposes of foreign insurance branch operations in Chile, the capital and reserves (patrimonio) effectively invested in Chile is considered, and not that of the main office. Such capital and reserves (patrimonio) must be effectively transferred and converted into domestic currency in conformity with any of the systems authorised by law or by the Banco Central de Chile. The increases in capital that do not come from the capitalisation of reserves will have the same treatment as the initial capital. In transactions between a branch and its main office or other related companies abroad, they will be considered as independent entities.

Insurance may be issued directly or through insurance brokers who, to engage in that activity, must be enrolled in the Register maintained by the SVS, and must satisfy the requirements of the law.

Sale of insurance for international maritime shipping, international commercial aviation and space launching and freight (including satellites) and goods in international transit.

(Includes goods transported, the vehicle transporting the goods and any civil responsibility deriving therefrom. Does not include national transport (cabotage)).

Reinsurance services are provided by reinsurance corporations and branches established in Chile in accordance with the provisions of the law on corporations and authorised by the SVS. Insurance corporations may also provide reinsurance services as a complement to their insurance business if their articles of association so allow.

Reinsurance services may also be provided by foreign reinsurers and foreign reinsurance brokers enrolled in the Register maintained by the SVS.

1. Publicly offered securities may be traded by legal persons established under Chilean law, whose sole purpose is securities brokerage, either as members of a stock exchange (stockbrokers) or outside the stock exchange (securities agents). However, only stockbrokers may trade shares or their derivatives (subscription options) on the stock exchange. Non-share securities may be traded by stockbrokers or securities agents registered with the SVS.

2. Publicly offered securities risk rating services are provided by rating agencies established for the sole purpose of rating publicly offered securities, and they must be enrolled in the Register of Risk Rating Agencies (Registro de Entidades Clasificadoras de Riesgo) maintained by the SVS.

3. Securities custody consists of the physical safe-keeping of securities’ certificates and may be undertaken by securities intermediaries (stockbrokers and securities agents) as an activity complementary to their sole purpose. It may also be undertaken by entities that provide depository and custodial services for securities which should be established as special purpose corporations (sociedades anónimas especiales) with the sole purpose of receiving in deposit publicly offered securities from entities authorised by law and to facilitate operations for the transfer of such securities (centralised securities depositories, depósitos centralizados de valores).

4. Financial advisory services, which involve giving financial advice on financing alternatives, investment appraisal, investment possibilities and debt rescheduling strategies may be undertaken by securities intermediaries (stockbrokers and securities agents) as an activity complementary to their sole purpose.

Intermediation of publicly offered securities, except shares (CPC 81321).

Subscription and placement as agents (underwriting).

• Intermediation of publicly offered shares of corporations (CPC 81321) (includes subscription and placement as agents, underwriting).
• Operations in stock exchange derivatives authorised by the Superintendence of Securities and Insurance(Superintendencia de Valores y Seguros) (includes only dollar and interest rate futures, and options on shares. Shares must fulfill the requirements established by the respective clearing house, cámara de compensación).

Cattle and agricultural commodities exchanges.

Service of clearing houses of futures and options on cattle and agricultural commodities.