Banking Regulation 2026 Comparisons

The Chilean banking sector is primarily governed by the General Banking Act (Ley General de Bancos, LGB), which establishes the legal framework for the formation, operation, supervision, solvency and resolution of banking institutions.

The Financial Market Commission (Comisión para el Mercado Financiero, CMF) was created by Law No 21,000 (2017), which unified the supervision of securities, insurance and banking markets under a single authority. Subsequently, Law No 21,130 (2019) modernised the LGB and formally integrated banking supervision – previously exercised by the former Superintendency of Banks and Financial Institutions (SBIF) – into the CMF’s institutional framework, while implementing Basel III capital and prudential standards.

In addition to the LGB, banks are subject to extensive secondary regulation issued by the CMF, principally through the Recopilación Actualizada de Normas (RAN), which sets detailed requirements on capital adequacy, liquidity management, corporate governance, financial reporting, operational risk and conduct of business. The CMF also regulates related financial service providers, including payment card issuers and banking support companies.

The Central Bank of Chile plays a complementary regulatory role. Although it does not directly supervise banks, it issues binding macroprudential and monetary regulations under its Constitutional Organic Law. These rules – compiled in its Compendium of Financial Regulations – govern matters such as liquidity requirements, foreign exchange operations, large-value payment systems and financial market infrastructures. Compliance with Central Bank standards is overseen by the CMF.

Law No 21,236 (2020) on Financial Portability introduced a streamlined mechanism allowing consumers and small businesses to refinance or transfer financial products – including loans and mortgages – between institutions through a simplified and standardised process. This statute has materially impacted banks’ credit operations and competitive dynamics in retail banking.

Law No 21,521 (2023), commonly referred to as the Fintech Law, established a comprehensive regulatory framework for technology-based financial services, including crowdfunding platforms, alternative trading systems and the Open Finance System (Sistema de Finanzas Abiertas). Although banks are not the primary regulated entities under this statute, the law significantly affects the banking ecosystem, particularly in relation to data-sharing obligations, interoperability and competition in digital financial services.

Together, the LGB, CMF regulations, the Central Bank’s prudential framework and recent structural reforms form a comprehensive regulatory architecture focused on:

• financial stability;
• adequate capitalisation;
• sound risk management;
• consumer protection; and
• the orderly functioning of the payment system.

The licensing of banking institutions in Chile is governed by the General Banking Act (LGB), which requires that any entity wishing to operate as a bank obtain formal authorisation from the CMF. Founders must meet stringent solvency and integrity requirements: they must have sufficient consolidated net worth to support the projected investment and demonstrate a commercial and financial record free from conduct that may compromise depositors or the stability of the institution.

Authorisation Requirement

Under the LGB, banks may only be incorporated as special sociedades anónimas, created exclusively for banking purposes. Their corporate name must include the term “Banco” and avoid any expression suggesting State affiliation. Banks may only engage in activities expressly authorised by law, including deposit-taking and lending, and must comply with prudential, operational and governance requirements as determined by the CMF.

Application Process, Timelines, Costs and Regulatory Engagement

Bank authorisation is granted through a three-stage approval process.

Provisional authorisation

Applicants begin by submitting a formal request to the CMF, accompanied by the documentation set out in the official “minute” for the constitution of a bank. This includes a three-year business plan, details of the founders, corporate structure and the proposed operational model. At the time the provisional authorisation is granted, founders must provide a guarantee equal to 10% of the projected capital, as established in Article 27, paragraph 4 of the General Banking Act (LGB). The CMF evaluates compliance with statutory requirements, including shareholder eligibility and the bank’s corporate purpose. The procedure has no monetary cost, and no legally fixed response timeline applies.

Authorisation to incorporate the bank (legal existence)

Once provisional authorisation is obtained, founders may legally incorporate the bank. The CMF continues to evaluate compliance with the requirements set out in Articles 27–31 of the LGB, ensuring the institution meets corporate, governance, capital and organisational criteria. This stage applies both to domestically formed banks and to foreign banks seeking to establish a branch in Chile, which must likewise submit a detailed request under the applicable guidelines.

Authorisation to commence operations

Before beginning operations, the CMF must verify that the bank is fully prepared to function safely and effectively. This includes confirmation of adequate human resources, technological infrastructure and internal controls, as well as readiness to comply with prudential regulation. The Central Bank of Chile may also provide observations regarding the systemic effects of market entry. Only once these verifications are complete does the CMF grant final operational authorisation.

Activities and Services Covered; Restrictions

Under the LGB, banks may engage in financial intermediation activities explicitly authorised by statute, including accepting deposits, granting loans, issuing credit/debit instruments, and conducting financial operations permissible for banking institutions. Their corporate object must be strictly limited to activities listed in the LGB, and they must observe general restrictions on exposures, governance and operational risks. Names must comply with statutory rules and may not resemble those of existing banks or suggest a governmental nature.

Ancillary Activities and Additional Regulatory Requirements (MiFID II, MiCAR)

Chile’s banking regulation is domestic-law based, and European frameworks such as MiFID II and MiCAR do not apply. Banks may, however, carry out ancillary or complementary financial services that are authorised under Chilean regulation, such as issuing payment cards or offering auxiliary credit services, subject to the rules established in the CMF’s regulatory framework, including the Recopilación Actualizada de Normas (RAN).

European Passporting (Branches and Cross-Border Services)

Chile is not a member of the European Union, so Chilean banks do not have access to the EU passporting regime for branches or cross-border services. Any Chilean bank wishing to operate in an EU member state must obtain local authorisation under the laws of the host jurisdiction. Conversely, foreign banks, including EU-based institutions, may establish a branch in Chile provided they comply with the authorisation process set out in the LGB, particularly the requirements applicable to foreign institutions under Article 27 and related provisions.

Requirements Governing Change in Control: Thresholds and Restrictions

Under Chilean banking regulation, any person seeking to acquire or increase a significant ownership stake in a bank must satisfy strict solvency and integrity standards. The supervisory authority examines these conditions whenever an investor seeks to acquire 10% or more of a bank’s share capital, or when combined holdings exceed that threshold.

Founders and significant shareholders must demonstrate adequate consolidated net worth and a record free of conduct that could endanger the institution or its depositors. These same integrity and solvency requirements apply when evaluating changes in control.

Further, Article 35 bis of the General Banking Act requires prior CMF approval for changes in control that could result in a bank or group of banks achieving systemic importance, including mergers, acquisitions of all or substantial assets and liabilities (defined as one third or more of book value), or the takeover of two or more banks by the same person or controlling group.

Chile does not impose special restrictions on foreign ownership of regulated entities beyond meeting solvency and integrity requirements and complying with the authorisation process. Foreign investors acquiring control must undergo the same regulatory evaluation as domestic investors.

Nature of Regulatory Filings and Related Obligations

Any person acquiring 10% or more of a bank’s capital must submit a formal filing to the CMF, providing information sufficient for the supervisor to assess the acquirer’s financial capacity, business reputation and compliance with legal eligibility standards. The review includes analysis of commercial and financial history, as well as any conduct suggesting potential risk to depositors or institutional stability.

For transactions involving potential systemic impact – whether through mergers, acquisitions or bank takeovers – special prior authorisation must be requested under Article 35 bis. The filing must describe the transaction structure, the resulting shareholding composition, and the expected effect on market concentration and systemic relevance.

Where the transaction involves cross-border investment, foreign investors must also register the capital contribution with the Central Bank of Chile when inflows exceed USD 10,000, according to Chapter XIV of the Compendium of International Exchange Regulations. This is a notification, not an approval requirement.

Ongoing Requirements Towards the Regulator

Once a person becomes a significant or controlling shareholder, several ongoing obligations apply:

• continuous compliance with solvency and integrity standards, which the CMF may reassess periodically or when circumstances warrant; and
• ongoing reporting obligations, including disclosure of any subsequent acquisitions or dispositions of shares, when such acquisitions maintain or modify a participation of 10% or more – these must be reported to the CMF and relevant exchanges no later than the day after the transaction, including whether the purpose is control or investment.

The CMF maintains authority to monitor ownership structures and assess risks associated with concentration, related-party influence or cross-holdings, especially where such positions may affect systemic stability. In cases where control changes create a bank of potential systemic importance, the CMF may impose additional requirements, including enhanced reporting, governance measures or structural safeguards to mitigate prudential concern.

Statutory and Regulatory Requirements

Corporate governance for banks in Chile is governed primarily by the General Banking Act (LGB) and detailed regulatory standards issued by the Financial Market Commission (CMF). The CMF has recently strengthened and consolidated the regulatory framework applicable to banks, updating the Recopilación Actualizada de Normas (RAN) to align Chilean governance standards with international best practices.

In January 2026, the CMF published a major regulatory proposal (open for public consultation until 29 April 2026) integrating and modernising governance rules, including amendments to RAN Chapters 1-4 and 1-13 and the creation of Chapter 21-15, which incorporates recovery planning into the governance and risk-management framework. The proposal enhances minimum requirements for board functioning, risk management oversight, internal controls, and decision-making transparency, reflecting recommendations from the IMF–World Bank FSAP. Once finalised, these reforms are expected to apply from the management assessment process corresponding to the year 2028.

The CMF emphasises that banks, as systemically relevant entities, must maintain robust governance structures, including effective boards, strong risk-management functions, internal audit systems, and policies aligned with the complexity, size and risk profile of the institution as reflected in the proposed governance framework under consultation until April 2026.

Voluntary Codes and Industry Initiatives

While the Chilean banking governance framework is heavily statutory and regulator-driven, the CMF’s reforms explicitly incorporate international best practices – including Basel Committee principles and Financial Stability Board recommendations – into the updated governance standards. The 2026 governance proposal aims to consolidate “principles and good practices of banking corporate governance”, signalling a hybrid model in which international guidelines function as soft law, guiding supervisory expectations even though they are not formally mandatory.

Additionally, individual banks may publish their own governance principles and internal codes aligned with market best practices. Such voluntary codes typically reinforce transparency, board effectiveness and ethical conduct, though they operate within the boundaries of CMF-mandated governance obligations.

Diversity Requirements

Neither the LGB nor the CMF’s governance regulations impose explicit numerical or quota-based diversity requirements for bank boards. However, the updated governance standards emphasise board suitability, competence and independence, which implicitly support diversity in skills, backgrounds and professional experience.

The CMF’s 2026 consultation proposal specifically strengthens requirements on the fitness and propriety of directors and senior management, including expectations for well-balanced governance structures aligned with international standards.

Therefore, while diversity is encouraged as a governance best practice, it is not yet mandated through Chilean banking law or regulation.

Bankers’ Oath or Equivalent Binding Conduct Rules

Chile does not have a statutory bankers’ oath analogous to those in certain European jurisdictions. However, bank employees are subject to binding ethical and conduct standards set out in the LGB, CMF regulations and internal governance frameworks. The CMF’s updated governance and risk-management regulations require banks to implement the following:

• codes of conduct and ethics;
• internal control frameworks;
• risk-culture expectations; and
• clear accountability standards for employees and executives.

These regulatory requirements function as the Chilean equivalent of a formal “bankers’ oath”, reinforcing integrity, responsibility and prudential conduct across the organisation.

Designation of Directors and Senior Managers: Regulatory Approval and Assessment

In Chile, banks are subject to a supervisory framework under which the CMF evaluates the suitability of board members and senior management as part of its broader corporate-governance and risk-management oversight. The CMF’s 2026 regulatory reform proposal strengthens governance rules applicable to banks, explicitly enhancing the evaluation of fitness, propriety, competence, independence and suitability of directors and senior executives. This reform reorganises governance rules in the RAN through amendments to Chapters 1-4 and 1-13, and the creation of Chapter 21-15, incorporating rigorous standards for the assessment of individuals in key managerial and decision-making positions.

The updated governance framework underscores the role of the board and senior management in ensuring sound decision-making, robust internal controls, comprehensive risk management and alignment with international principles such as those issued by the Basel Committee and the Financial Stability Board. Banks must maintain governance structures appropriate to their size, complexity and risk profile, and the CMF reviews whether directors and senior managers satisfy integrity, competence and experience expectations in accordance with the revised governance norms.

Although Chilean regulation does not require a prior individual licensing or approval process for each appointment comparable to some foreign regimes, the CMF directly supervises compliance with governance standards and may intervene if an appointee fails to meet required thresholds of fitness and propriety. The CMF’s supervision includes the authority to request information, review backgrounds, examine conflicts of interest and evaluate independence requirements – especially in light of recent regulatory developments, such as those related to independent directors under NCG 533 (published in March 2025 and entering into full force on 11 November 2026) which set objective criteria to assess independence and disqualifying conflicts.

Screening Requirements and Registration Obligations

Senior management and directors of regulated entities must be recorded in the CMF’s official registry of directors, senior executives and administrators, which contains personal identification (including Rol Único Tributario, RUT), role designation and the date of appointment. This registry allows the CMF to monitor and maintain updated information on individuals who hold positions of significant responsibility within supervised institutions.

The registry functions as a transparency and supervisory tool rather than a licensing mechanism: while no documents are required for registration, banks must promptly update the CMF with appointment data, enabling ongoing oversight. The CMF’s governance-modernisation initiatives reinforce this framework by establishing clearer expectations for background screening, including assessment of conflicts of interest, economic or professional dependencies, and prior conduct relevant to fiduciary duties. For example, the criteria applicable to independent directors – such as restrictions on economic or credit relationships with the institution – reflect broader suitability principles that inform expectations for senior management as well.

Collectively, these screening mechanisms – registry monitoring, governance compliance reviews, conflict-of-interest assessments and experience-based suitability expectations – form an integrated supervisory approach aimed at ensuring that individuals entrusted with the management and strategic direction of banks demonstrate integrity, competence and independence consistent with the systemic role of financial institutions in Chile.

Individuals Subject to Remuneration-Related Oversight

While Chilean banking regulation does not impose specific remuneration rules targeting particular roles within banks, the CMF’s governance framework establishes expectations applicable to directors and senior management, given their central role in ensuring sound governance, risk management and decision-making. The CMF’s regulatory reforms emphasise the suitability, integrity, competence and independence of these individuals – criteria that indirectly shape remuneration governance by requiring that compensation practices align with prudent conduct and avoid conflicts of interest.

The oversight applies to board members, senior executives and those with key risk-management and control functions, all of whom must meet fitness, propriety and independence requirements under the CMF’s governance standards.

Relevant Remuneration Principles

Although the RAN and governance proposals do not specify quantitative caps, deferral rules, variable-pay restrictions or incentive-risk alignment mechanisms (as exist under certain foreign regimes), the CMF’s updated governance framework implicitly sets principles that remuneration must not undermine.

The CMF’s governance reform emphasises:

• sound decision-making;
• robust internal controls;
• comprehensive risk-management; and
• alignment with international best practices.

These are directly relevant to remuneration structures (eg, avoiding incentives that generate excessive risk-taking).

Additionally, independence and conflict-of-interest standards – particularly those applicable to independent directors under NCG 533, which enters into force on 11 November 2026 – create implicit boundaries on remuneration by prohibiting economic relationships or incentives that could compromise objectivity.

Together, these governance principles function as de facto remuneration guidelines, requiring banks to structure compensation systems that reinforce integrity, prudent risk culture and independence within key functions.

Regulator’s Supervisory Approach

The CMF does not review or approve individual remuneration packages. Instead, its supervisory approach focuses on evaluating whether governance, risk-management and independence standards are being upheld, and whether compensation structures could impair these obligations.

The supervisory approach includes:

• assessment of governance quality, including the effectiveness of oversight structures and risk-management frameworks – these assessments incorporate the strengthened governance criteria introduced through amendments to RAN Chapters 1-4 and 1-13, and the new Chapter 21-15 on recovery planning;
• ongoing monitoring of directors and senior management through the CMF’s official registry, ensuring transparency and enabling supervisory follow-up where remuneration may affect conflicts of interest or independence; and
• oversight of independence conditions under NCG 533, which prohibits economic, professional, credit or commercial relationships that exceed objective thresholds – effectively preventing remuneration or compensation structures that could compromise independence.

This approach reflects a principles-based supervisory model, in which remuneration is not regulated through prescriptive requirements but must be consistent with broader prudential and governance standards applicable to systemically relevant institutions.

Chile’s AML/CFT framework is primarily grounded in Law No 19,913 (2003), which created the Financial Analysis Unit (Unidad de Análisis Financiero, UAF) and established the core legal structure for the prevention of money laundering and terrorist financing. This statute defines reporting obligations, including Suspicious Transaction Reports (ROS), identifies obliged entities and establishes administrative sanctions for non-compliance.

In addition, Law No 20,393 (2009) establishes the criminal liability of legal entities – including banks – for offences such as money laundering and terrorist financing. This law has had a significant impact on compliance structures within the financial sector, as institutions must implement effective crime-prevention models to mitigate corporate criminal exposure.

Within the banking sector, AML/CFT obligations are further developed through regulations issued by both the UAF and the Financial Market Commission (CMF). Banks must comply with the detailed standards set out in the CMF’s Recopilación Actualizada de Normas (RAN), which align with UAF instructions and the 40 Financial Action Task Force (FATF) Recommendations.

The UAF acts as the central authority for AML/CFT oversight and periodically updates binding obligations applicable to reporting entities. UAF Circular No 62 (2025) consolidates and expands due diligence, suspicious transaction monitoring, reporting standards and enhanced controls applicable to politically exposed persons (PEPs). Entities must:

• conduct institutional risk assessments;
• maintain updated prevention manuals;
• appoint a Chile-based compliance officer;
• implement employee training programmes; and
• report high-value cash transactions and electronic fund transfers above regulatory thresholds.

Complementarily, CMF Circular Letter No 2,368 (2026) strengthened sector-specific requirements applicable to banks, reinforcing the following:

• beneficial ownership identification;
• risk-based customer due diligence;
• internal control mechanisms; and
• governance responsibilities in AML/CFT matters.

The Chilean regime follows a risk-based approach consistent with international standards, including measures aimed at preventing terrorist financing and the proliferation of weapons of mass destruction, and reflects recommendations arising from the Financial Action Task Force of Latin America’s (GAFILAT’s) mutual evaluation processes.

Chile’s deposit guarantee system stands out as genuinely unusual by international standards. Under Articles 144 et seq of the General Banking Law (LGB), the State Deposit Guarantee protects natural persons in respect of deposits held through savings accounts or nominative or bearer instruments issued by banks or savings and credit co-operatives under CMF supervision. The guarantee operates on two levels. At the institutional level, it covers 100% of all amounts owed by a single institution to a natural person – including adjustments and interest accrued through the date of payment – up to a cap of 200 UF per calendar year. At the system-wide level, it covers 100% of all amounts owed across the banking system to that same person, up to 400 UF per calendar year.

A separate and broader protection applies exclusively to demand deposits (obligaciones a la vista), such as current accounts and demand savings accounts. Under Article 132 of the LGB, these obligations are paid immediately in the event of a bank’s compulsory liquidation, outside the ordinary liquidation waterfall and without distinction between natural and legal persons.

Time deposits (depósitos a plazo), including those allowing early withdrawal, do not fall within the scope of Article 132. They are instead protected under the State Deposit Guarantee mechanism regulated in Articles 144 et seq of the LGB, subject to the statutory caps applicable to natural persons.

The guarantee is financed by the Ministry of Finance and becomes payable upon liquidation or insolvency of the relevant institution, with the liquidator responsible for making payment. To receive it, the beneficiary must assign to the State any residual claim on the guaranteed instrument beyond the applicable cap. This is the subrogation mechanism (subrogación): the State steps into the depositor’s shoes as creditor and recovers what it paid out from the institution’s estate – so no prior fund is required.

The decision to place a bank into forced liquidation rests with the CMF, acting on a report from the Central Bank of Chile that assesses whether doing so would pose a risk to the stability of the financial system as a whole.

Chile’s capital and liquidity framework for banks reflects the country’s adoption of Basel III standards, implemented domestically through Law No 21,130 of 2019, which modernised the LGB to bring it in line with international prudential regulation.

Basel III is the set of reforms developed in 2010 by the Basel Committee on Banking Supervision in response to the weaknesses exposed by the 2008 financial crisis. While technically non-binding, it has become the de facto global reference for prudential banking regulation and is followed by virtually all major economies.

Capital Requirements

Under the LGB, a bank’s capital adequacy is measured against its Risk-Weighted Assets (RWA) – a methodology that assigns different risk weights to different asset classes, so that riskier exposures require more capital to back them.

Article 51 of the LGB sets the minimum capital threshold at 800,000 UF, of which at least 400,000 UF must be paid-in at the time of incorporation. During the phase before full capitalisation is reached, stricter transitional ratios apply: a bank with paid-in equity of 400,000 UF must maintain effective equity of at least 12% of RWA, dropping to 10% once equity reaches 600,000 UF.

Once fully capitalised, the general rule under Articles 66 and 66 bis of the LGB requires banks to maintain effective equity of no less than 8% of RWA, net of required provisions. On top of this floor, banks must hold an additional capital conservation buffer of 2.5% of RWA – the mechanism through which Chilean regulation implements the Basel III buffer framework, designed to ensure banks can absorb losses without breaching minimum requirements.

Liquidity Requirements

On the liquidity side, Chapter 12-20 of the CMF’s Recopilación Actualizada de Normas (RAN) places primary responsibility for liquidity risk management on each bank individually. Every institution must develop and maintain a Liquidity Management Policy (Política de Administración de Liquidez, PAL), setting out the internal framework through which the bank ensures it can meet its obligations under both normal and stress conditions. The PAL must account for the size, complexity and business model of the institution, and must cover the full cycle of liquidity risk management: identification, quantification, limitation and control. The board of directors is required to review the PAL at least once a year, including stress testing and contingency planning exercises.

Complementing this, Chapter 21-14 of the RAN establishes Chile’s internal liquidity assessment framework, functionally comparable to the Internal Liquidity Adequacy Assessment Process (ILAAP) developed under Basel standards. Although the acronym ILAAP is commonly used in international practice, Chilean regulation does not formally adopt that terminology; instead, it requires banks to demonstrate, through supervisory reporting and internal methodologies, that their liquidity planning and risk assessment are consistent with their specific risk profile.

Systemically Important Banks

A separate and more demanding regime applies to systemically important banks – those whose failure would have consequences for the financial system well beyond those of an ordinary institution, given their size, interconnectedness and the difficulty of substituting their functions. Under Chapter 21-11 of the RAN, systemic importance is assessed against four criteria:

• size;
• local interconnection;
• local substitutability; and
• complexity.

Designation as a systemically important institution requires a reasoned resolution by the CMF board, subject to prior favourable agreement from the Central Bank of Chile. Once designated, a bank may be required to hold additional basic capital of between 1.0% and 3.5% of RWA above the standard 8% minimum, among other enhanced requirements.

It is worth noting that liquidity and operational risk management increasingly intersect with other regulatory frameworks – including cybersecurity, which the CMF treats as a component of operational risk and which is subject to its own specific requirements under the RAN.

Title XIV of the LGB establishes what the law calls Early Regularisation Measures – a framework designed to intervene before a deteriorating situation becomes irreversible. The trigger is a bank falling below minimum capital requirements or being forced to resort to Central Bank financing under conditions that signal financial stress. The underlying logic is preventative: the law seeks to contain the problem before liquidation becomes the only option.

Once a triggering event occurs, the bank must notify the CMF immediately and, within five days – extendable to ten at the Commission’s discretion – submit a regularisation plan setting out the specific measures it proposes to address the capital or liquidity shortfall. The CMF may approve, reject or request supplementation of the plan. If approved, the bank must implement it and report periodically to the Commission on progress.

Failure to submit the plan on time, non-approval or non-compliance with its terms triggers the more coercive tools available under Article 117. Even before that point, however, the CMF may impose a range of interim restrictions on the institution: prohibitions on granting or renewing loans, disposing of fixed assets or making governance changes without prior authorisation – any resignation or appointment of directors, attorneys-in-fact or senior managers requires CMF approval to take effect.

If the situation warrants closer oversight, the Commission may appoint a delegated inspector with powers to suspend resolutions of the board or acts of attorneys-in-fact, or go further and appoint a provisional administrator vested with the full ordinary management powers that the law and by-laws assign to the board and general manager.

Where these measures fail to stabilise the institution, Title XV of the LGB governs compulsory liquidation. It is worth noting that this regime applies exclusively to forced liquidation: if a bank opts for voluntary wind-down, it is subject instead to the general reorganisation and liquidation framework under Law No 20,720.

Chile and the Financial Stability Board Key Attributes

The Financial Stability Board (FSB)’s Key Attributes of Effective Resolution Regimes set out 12 principles for managing the orderly failure of systemic financial institutions without resorting to public funds. Their core objectives are preserving financial stability, maintaining the continuity of critical functions and avoiding moral hazard.

Assessed against these principles, Chilean regulation falls materially short. The CMF holds broad temporary administration powers and a range of supervisory tools, but it lacks the resolution powers that the Key Attributes regard as essential. Most notably, the CMF has no jurisdiction over institutions outside its supervisory perimeter, no power to implement resolution actions aimed at ensuring service continuity or the prompt return of customer assets, and the LGB imposes no obligation on any authority to guarantee the continuity of critical functions during a resolution process. In short, Chile’s framework is built around supervised administration and liquidation – not resolution in the FSB sense.

Payment Hierarchy in Compulsory Liquidation

The LGB establishes a clear priority order designed to protect small depositors and system stability. Under Article 132, upon declaration of compulsory liquidation, demand deposits – current accounts and other on-demand obligations – are paid immediately from available funds, outside the ordinary liquidation waterfall and without being subject to its procedural constraints. If available funds are insufficient, the liquidator may dispose of assets to cover them; and, if necessary, the Central Bank of Chile steps in to provide the required funds, acquiring bank assets by way of set-off or extending loans to the liquidator.

Time deposits, by contrast, are not afforded this immediate treatment and instead fall under the State Deposit Guarantee described earlier, which operates through the subrogation mechanism already explained.

Chile’s ESG regulatory landscape has evolved significantly in recent years, combining environmental reform, enhanced corporate governance standards and growing supervisory focus on sustainability-related financial risks. While Chile does not have a single consolidated ESG statute applicable specifically to banks, ESG obligations arise from a combination of environmental legislation, disclosure standards and prudential regulation issued by the CMF.

Environmental and Sustainability Regulation

Chile has implemented several structural reforms shaping the ESG environment in which banks operate. These include:

• reforms to the Environmental Impact Assessment System (SEIA), incorporating climate change considerations into project approvals;
• creation of the Biodiversity and Protected Areas Service (Law No 21,600);
• Green Tax Compensation System (SCE), a market-based mechanism operational since 2023;
• Extended Producer Responsibility Law (Law No 20,920); and
• Taxonomy of Environmentally Sustainable Economic Activities (T-MAS), launched in 2025 as a non-binding classification system guiding sustainable finance.

Although these statutes do not impose direct prudential obligations on banks, they materially affect credit risk assessment, project finance structures and long-term asset valuation in carbon-intensive sectors.

Social and Governance Developments

Recent labour reforms – including the 40-Hour Workweek Law (No 21,561) and Law No 21,643 (Karin Law) – have strengthened workplace protections and corporate compliance obligations, indirectly affecting operational and reputational risk management within financial institutions.

On the governance side, CMF General Standards No 461 and No 519 require listed companies and registered issuers – including banks whose securities are publicly traded – to disclose and manage material non-financial risks. ESG risk disclosure is therefore embedded within annual integrated reporting obligations (memorias anuales integradas).

ESG Obligations Applicable to Banks Under CMF Supervision

Beyond general ESG legislation, banks face increasing supervisory expectations under the prudential framework.

• Climate and environmental risk as part of risk management – The CMF has incorporated climate-related risks into its supervisory approach to operational and financial risk. Banks are expected to identify, measure and manage both physical risks (eg, extreme weather exposure) and transition risks (eg, regulatory change and asset repricing).
• Pillar 2 treatment of ESG risks – Under the Basel III-based prudential regime, ESG risks are considered within the Pillar 2 supervisory review process. Banks must integrate climate and sustainability risks into their Internal Capital Adequacy Self-Assessment Report (IAPE – Informe de Autoevaluación de Patrimonio Efectivo), assessing potential impacts on capital adequacy and asset quality.
• Disclosure and governance integration – ESG risks must be embedded in governance structures, board oversight and strategic planning processes. The CMF evaluates whether sustainability-related risks are appropriately integrated into internal control and risk management systems.

Trends and Regulatory Direction

Chile’s ESG regulatory trajectory reflects progressive alignment with international standards, including the Task Force on Climate-related Financial Disclosures (TCFD) framework and Basel Committee guidance on climate-related financial risks. While the regime remains principles-based rather than prescriptive, supervisory scrutiny is increasing, particularly in relation to climate risk governance and disclosure consistency.

For banks, ESG is therefore not merely a disclosure matter but a prudential and risk-management consideration, increasingly integrated into capital planning and supervisory dialogue.

The EU’s Digital Operational Resilience Act (DORA) establishes a comprehensive framework for financial entities to ensure digital resilience, covering ICT risk management, incident reporting, resilience testing and oversight of critical third‑party providers. Chile does not yet have a single consolidated statute equivalent to DORA. Instead, the regulatory landscape is fragmented, with obligations spread across CMF regulations, sector‑specific legislation and recently enacted cybersecurity legislation.

Key Legislative and Regulatory Instruments

The principal instruments are as follows.

• ICT risk management and cybersecurity – Chapter 20-10 of the CMF’s Recopilación Actualizada de Normas (RAN), in force since December 2020, establishes the framework for information security and cybersecurity management applicable to banks, their subsidiaries, banking support companies and payment card operators. It sets out governance, risk management, incident response and resilience requirements aligned with international best practices.
• Incident reporting – Chapter 20-8 of the RAN governs the reporting of material operational incidents to the CMF, establishing notification timelines, classification criteria and escalation requirements broadly aligned with DORA’s incident notification framework.
• Business continuity – Chapter 20-9 of the RAN establishes mandatory business continuity management requirements for banks, including the development and testing of continuity plans and recovery procedures – the functional equivalent of DORA’s digital operational resilience testing pillar.
• Oversight of outsourcing and critical providers – Chapter 20-7 of the RAN regulates outsourcing arrangements for banks, including technology service providers and cloud services, with obligations covering due diligence, contractual requirements and ongoing monitoring of critical third-party providers.
• Resilience testing – Law No 21,521 (Fintech Law, 2023) introduces security and continuity standards for financial platforms, complementing CMF guidance on penetration testing and business continuity planning.
• Data protection – Law No 21,719 on the Protection of Personal Data was enacted in December 2024, modernising the prior regime under Law No 19,628 and aligning Chile with OECD and EU standards. Full entry into force – including the operationalisation of the new Data Protection Agency – is scheduled for December 2026 following a 24‑month vacatio legis.
• Critical digital infrastructure – The National Cybersecurity Strategy and Law No 21,663 (Ley Marco sobre Ciberseguridad), now fully in force, establish cross‑sector obligations for critical infrastructure operators. The National Cybersecurity Agency (ANCI) has been operational since 1 January 2025.

Comparison With DORA

Unlike DORA’s unified and harmonised regime across the EU, Chile’s framework remains sectoral and dispersed. Nevertheless, DORA’s core pillars – ICT risk management, incident reporting, third‑party oversight and resilience testing – are reflected in CMF regulations and evolving legislation. The enactment of Law No 21,663 and the forthcoming full operationalisation of the data protection framework represent significant steps towards consolidating Chile’s digital resilience obligations.

Trends and Developments

Chile is transitioning towards greater integration and standardisation of digital resilience requirements. The Fintech Law, Law No 21,663 and the newly enacted data protection framework signal convergence with international standards, including those of the EU. Over the coming years, Chile is expected to consolidate a more centralised and robust regime for operational resilience, with enhanced reporting and supervisory powers.

Supervision of Critical Third-Party Providers

Under DORA, competent authorities may identify, designate and directly supervise critical ICT third-party providers and impose binding requirements on them. Chile’s regulatory approach remains mediated through entity-specific outsourcing rules and supervisory expectations – principally via the CMF – without an established regime for the formal designation and direct oversight of critical ICT providers comparable to DORA’s model. However, Law No 21,663 introduces a cross-sector framework for the identification of critical entities, distinguishing between Essential Service Providers (PSE) and Operators of Vital Importance (OIV), the latter being subject to heightened obligations including mandatory incident reporting. ANCI holds supervisory, inspection and sanctioning powers over these categories, and has been operational since 1 January 2025, with the specific obligations applicable to OIVs entering into force on 1 March 2025. That said, financial entities remain subject to the CMF as their primary sectoral supervisor, reflecting the continued distribution of oversight responsibilities across regulators. While this framework does not replicate DORA’s extraterritorial supervisory reach over third-party providers, it represents a meaningful step towards a more structured national oversight regime for entities deemed critical to digital resilience.

Chile’s banking sector is entering a period of significant regulatory transformation. The CMF has laid out an ambitious two-year agenda that touches on virtually every dimension of banking activity, from how institutions manage capital and liquidity, to how they treat customers and share data. The common thread running through this agenda is the progressive implementation of the Fintech Law and Chile’s ongoing convergence with international supervisory best practices.

Open Finance

One of the most structurally significant developments on the horizon is the roll-out of Chile’s Open Finance System (SFA). Under this framework, banks will be required to make customer data available to authorised third parties, fundamentally altering the dynamics of competition and customer ownership in the financial sector. Following a public consultation process initiated in November 2025 – driven largely by requests from banks and other financial institutions for greater implementation flexibility – the CMF proposed extending the go-live date from July 2026 to July 2027. This proposed amendment was subject to a 30-day public comment period; institutions should monitor the CMF’s formal confirmation of the revised timeline. Regardless of the final date, institutions that have not yet begun reviewing their data architecture, consent management systems and third-party contracting frameworks should treat this as a priority.

Consolidated Debt Registry

A new centralised registry consolidating borrower indebtedness across the financial system will become operational on 1 April 2026. Administered by the CMF, the registry (REDEC) will require banks to standardise and harmonise the way they report credit information, while also granting borrowers a set of enforceable rights over their own data. The April 2026 deadline leaves little margin for delay; institutions should be finalising their compliance arrangements now.

Financial Resilience

Although the Financial Resilience Law is already in force, the specific obligations it will impose on banks depend on implementing regulations that have yet to be issued. Institutions should follow the CMF’s rule-making process actively, as the new framework is expected to impose meaningful additional requirements on systemically important banks.

Capital Adequacy (Basel III – Pillar 2)

The CMF is continuing to sharpen its approach to individual capital assessments for banks, building on several years of supervisory experience under the Basel III framework. New rules on liquidity requirements are also in development. Taken together, these measures signal a more granular and institution-specific approach to prudential oversight, moving away from one-size-fits-all capital ratios.

Credit Card Minimum Payment Rules

A dedicated regulatory initiative is underway to establish floor requirements for minimum monthly payments on credit cards. While the details are still being developed, the initiative is likely to require banks to revisit their product terms, consumer disclosures and credit risk assumptions for their revolving credit portfolios.

Fraud Prevention and Cybersecurity

Two concrete deadlines are approaching as a result of Chile’s Fraud Law. Banks must phase out printed co-ordinate cards by 1 August 2026; and, from 1 July 2026, strong two-factor authentication will be required for high-risk transactions and new customer onboarding. These obligations are already embedded in NCG No 538 and are subject to supervisory enforcement – institutions should not treat them as targets to be met at the last minute.

AML/CFT

CMF Circular No 2,368, issued on 2 February 2026, imposes materially higher AML/CFT standards on banks and other supervised entities. Among the most significant changes are the requirement to formally designate a senior compliance officer with direct accountability for AML/CFT matters, strengthened customer due diligence obligations and more detailed beneficial ownership identification requirements. Institutions that have not yet reviewed their compliance programmes against the new standard should do so without delay.

Market Conduct Standards

The CMF is in the process of developing a conduct framework that will set binding standards for the way banks – as well as insurers and fund managers – engage with their clients. The framework is expected to go beyond broad principles and establish specific, measurable obligations in areas such as product disclosure, fair treatment and complaint resolution. For banks, this signals a regulatory environment that will increasingly evaluate not just financial soundness but the quality of client relationships.

Outlook for 2026

Banks operating in Chile face an unusually concentrated set of hard deadlines in the first half of 2026, with the REDEC go-live on 1 April and the authentication and co-ordinate card requirements taking effect between July and August 2026. At the same time, the open finance roll-out and the conduct framework will require sustained strategic engagement well beyond those immediate milestones. Institutions that approach this agenda reactively risk being caught underprepared across multiple fronts simultaneously.