NUM. 20.789 CREATES THE FINANCIAL STABILITY COUNCIL Having present that the H. National Congress has given its approval to the following Bill: " TITLE I OF THE COUNCIL OF FINANCIAL STABILITY Article 1.-Create the Council of Stability Financial, advisory body under the Ministry of Finance, hereinafter referred to as 'the Council' or 'CEF', the function of which shall be to facilitate technical coordination and exchange of information among its participants in matters relating to the prevention and management of situations that may be at risk to the system In order to contribute in this way to the financial stability of the Chilean economy. The Council will be composed of the Minister of Finance, who will preside over him, the Superintendent of Securities and Insurance, the Superintendent of Banks and Financial Institutions, and the Superintendent of Pensions. The Council shall have the permanent advice of the Central Bank on all matters relating to its tasks. To this end, its President may participate in all the sessions of the CEF with the right to voice and to impose all the information and matters that are analyzed in the Council, in accordance with the provisions of Article 4 of the Constitutional Organic Law. of the Central Bank of Chile, contained in the FIRST ARTICLE of Law No. 18,840. The Council shall operate in the Secretariat and General Administration of the Ministry of Finance, which shall provide it with its Technical Secretariat, the infrastructure and the human and material resources necessary for its proper functioning. Article 2.-The Financial Stability Board shall have the following powers: 1. To request the Technical Secretariat, the Superintendents of Securities and Insurance, Pensions and Banks and Financial Institutions, hereinafter: together with the "Financial Superintendents", the carrying out of studies to monitor the stability of the financial system, as well as to contract such studies with third parties through the Technical Secretariat. Likewise, the Central Bank of Chile, in compliance with its advisory role, may carry out analyses or studies for that purpose as established by the Council of the Bank. 2. Request to the Financial Superintendents any information, even subject a reserve, which may be necessary to identify or assess possible risks to financial stability and which is available in such services or which they may request in accordance with applicable laws. The laws, regulations, contractual or other provisions on reservation shall not prevent the application of this number from being complied with. Accordingly, the information provided in accordance with this law shall exempt those who deliver it from any legal liability. The Superintendence of Banks and Financial Institutions shall comply with requests for the delivery of information referred to in this numeral in accordance with Article 14 of the General Law of Banks, the text of which has been recast, The Ministry of Finance was established in the decree with force of law No. 3, 1997, of the Ministry of Finance. The EFC may also ask the Central Bank of Chile for information necessary to identify or assess possible risks to financial stability, which may be provided by the CEF in the terms of its institutional legislation. The information received under this number may only be shared with those who participate in the meetings of the Council or of the working groups which it constitutes, as well as with those who perform functions of the Technical Secretariat, in the the context of the work of the Council. Where the information shared is subject to reservation, it shall be maintained in this respect by those who are aware of it in the Council. In the event of infringement of this prohibition, the provisions of Article 12 shall apply. 3. To recommend to the relevant services or bodies policies that contribute to financial stability. 4. To carry out the other requests for information and recommendations necessary for the performance of its function, as set out in Article 1. The powers of the Council are without prejudice to the powers conferred on its participants by their respective organic laws. In accordance with the above, the opinions or recommendations emanating from the Council shall not be binding. In case the policy or regulatory recommendations have an impact on the exercise of the powers of the Central Bank of Chile or are related to them, it shall proceed in accordance with the provisions of Article 19 of its constitutional law, Minister of Finance. Article 3.-In order to ensure the best performance of the work of the CEF, the Financial Superintendents and the Ministry of Finance must participate in the Council and in the working groups that are constituted by the Council, as well as to manage the processing and dispatch of requests for information or studies which the EFC entrusts in the framework of its legal powers. Furthermore, for this purpose, the respective Superintendents shall report to the Council on the facts, circumstances or events in their sector which may have systemic implications, without affecting their autonomy in the exercise of their powers. powers. Article 4.-The Council shall meet with the assistance of at least three of its members, including the Minister of Finance or his representative, in accordance with the provisions set out in the following paragraph. In case of absence or impediment of any of the members of the CEF, or of the President of the Central Bank, in the condition provided for in the third indent of Article 1, the legal subrogant or the person they indicate shall attend the session. especially to the Council or the Technical Secretariat. The participants of the EFC may also be accompanied by the persons and in the manner indicated by their rules of procedure. The Council shall be at least monthly. However, it must do so whenever requested by the Minister of Finance or three of its four members. Article 5.-The Council shall determine in an internal regulation the rules on summons to sessions, deliberations, the drafting of reports, the setting up of working groups, the management of information and the other rules it requires for its internal functioning. The Technical Secretariat shall make the relevant citations to each session of the EFC, raise and archive the minutes of the sessions, coordinate the operation of the inter-institutional working groups to be established by the Council in the fields of of its competence, it shall recruit studies at the request of the Council and carry out the other tasks entrusted to it by the Council itself. Article 6.-The nature and purpose of the functions of the CEF established in this law, and for the purposes of prudential the due respect thereof, considering that the advertising of the materials treated by this could affect financial stability, thereby harming the national interest in economic matters, shall be reserved for its deliberations and reports, as well as the documents, analyses or studies that are received or generated in the CEF, its working groups or the Secretariat Technique in the performance of its functions, unless disclosed according to the following paragraph. The acts declared reserved by this article shall maintain that character by the term referred to in the second paragraph of Article 22 of Law No. 20.285 on access to public information. However, if the reserve period referred to in the organic regulations of the entities making up the EFC is greater, the information required shall be maintained for that purpose for the latter period. The provisions of the foregoing paragraph shall not prevent the Council from disseminating the reports it issues and the documentation it generates in the field of its powers, when it resolves that this is in accordance with its purpose and functions. If this information is related to the privileges of one of its participants, the representative of the respective institution must have the favorable opinion to disseminate it. Without prejudice to the foregoing, the president of the CEF shall be present in March of each year to the Finance Committee of the Chamber of Deputies and to the Senate Finance Committee in order to report on general aspects of the activities of the EFC, in secret session. In any event, the Council may not release the information subject to reservation it receives in accordance with this law. TITLE II OTHER PROVISIONS Article 7.-Amend the General Law of Banks, whose recast, systematized and agreed text was fixed in the decree with force of law No. 3, 1997, of the Ministry of Finance, in the following terms: 1) In the first paragraph of Article 14, the following amendments are inserted: (a) Redeploy the conjunction "and" which follows the expression "Minister of Finance", by a comma. (b) Add, following the locution "Central Bank of Chile", the following: "and to the Financial Stability Board". 2. In Article 16, the following final indent is added: " In turn, in order to assess the risks of the financial situation of the entities subject to its audit, the Superintendence may require them, a background on the situation financial situation of all persons or entities belonging to the same business group, which could significantly commit the financial situation of the audited entity, as well as information leading to the determination of the ownership or control relationships and operations between them. For the purposes of this paragraph, a business group is defined in accordance with the terms set out in Articles 96 and below of Law No. 18,045 on Me Stock exchange. The information and background obtained by the Superintendence in accordance with this paragraph shall be subject to the system and the reserve obligations referred to in this law. " 3) Add, in Article 28 (a), the following paragraphs second and third: " The solvency requirement must be permanently fulfilled by the controlling shareholders of the bank in the terms of Article 97 of Law No. 18.045 on the Stock Market, and will consist of counting, individually or in together, with a consolidated net worth equal, in the proportion corresponding to them, to the capital bank. If the requirement laid down in the preceding paragraph is not complied with for a period exceeding that which the Superintendence determines for the purposes of regularisation, the occurrence of serious facts shall be presumed, for the purposes of Article 24, to be fear for the economic stability of the bank. These measures shall be used in accordance with Article 22. '; Article 8.-Attaché, in point (d) of Article 4 of Decree Law No 3,538 of 1980, which creates the Superintendence of Securities and Insurance, the following final paragraph, new: " In turn, in order to assess the risks to the financial situation of institutions subject to their supervision, the Superintendence may require them to do so on the financial situation of all persons or entities belonging to their own business group, which they may commit in form significant, the financial situation of the audited entity, as well as information leading to determine the ownership or control relationships and operations between them. For the purposes of this paragraph, a business group is defined in accordance with the terms set out in Article 96 et seq. of Law No. 18,045 on the Securities Market. The information and background obtained by the Superintendence in accordance with this paragraph shall be subject to the regime and the reserve obligations referred to in this law. " Article 9º.-Add, in Article 9º bis of the decree with force of law No. 251, of 1931, of the Ministry of Finance, on insurance companies, public limited companies and exchanges, the following second and third incissos: " When the consolidated net worth of the controllers, individually or in aggregate, is reduced to an amount lower than the risk capital defined in point (f) of Article 1 and is not remedied within the time limit determined by the Superintendence The Commission may, by way of a resolution, instruct the companies to refrain from carrying out the transactions and transactions that it specifically determines, with its related persons or through them, for up to six months, renewable for the same period. Likewise, in this case, the Superintendence may suspend the administration or all or some of the operations of the company, in terms that indicate the 3º and 4th of the article 44, renewable for the same period, designating for this purpose an administrator in accordance with Article 3 (d). '; Article 10.-Attaché, in point (h) of article 3º of the decree with force of law No. 101, of 1980, of the Ministry of Labor and Social Welfare, Organic Statute of the Superintendence of Pensions, the following final paragraph, new: " In turn, with the purpose of assessing the risks to the financial situation of the entities subject to its audit, the Superintendence may require them to do so on the financial situation of all persons or entities belonging to their the same group of companies, which could significantly compromise the situation the financial institution of the audited entity, as well as information leading to the determination of ownership or control relations and transactions between them. For the purposes of this paragraph, a business group is defined in accordance with the terms set out in Article 96 et seq. of Law No. 18,045 on the Securities Market. The information and background obtained by the Superintendence in accordance with this paragraph shall be subject to the regime and the reserve obligations referred to in Law No 20.255. " Article 11.-Attaché, in the third indent of article 66 of the constitutional organic law of the Central Bank of Chile, contained in ARTICLE FIRST of Law No. 18,840, after the point aside, which becomes a point followed, the following sentence: " For its part, the reserve will not apply in case the Financial Stability Board, with the sole aim of preventing situations that may import systemic risk for the stability of the financial system, requests the Bank to specific background to the performance of their legal competences. '; TITLE III Final provisions Article 12.-Without prejudice to the provisions of the institutional legislation of the bodies participating in the EFC, the infringement of the reserve obligations imposed in this law shall be punishable by penalties. provided for in Articles 246 and 247 of the Criminal Code, whatever the quality or status applicable to the offender. Article 13.-The annual cost incurred in the application of this law shall be financed with the resources provided for in the budget of the Secretariat and General Administration of the Ministry of Finance, the Superintendency of Securities and Insurance, the Superintendence of Banks and Financial Institutions and the Superintendence of Pensions and, as far as is not possible, with charge to those who are consulted in the Budget Item Public Treasury of the year concerned. TRANSITIONAL PROVISIONS Article 1.-The Council shall hold its first meeting within the calendar month following the publication of this Law and shall agree on the rules of procedure referred to in Article 5 of this Law. Article 2.-The solvency requirements that are incorporated in the literal (a) of Article 28 of the General Law of Banks, by means of the numeral 3) of Article 7 of this Law, and in Article 9º bis of the decree with force of law No 251, 1931 of the Ministry of Finance, by means of Article 9 of this Law, may only be required after 12 months after its entry into force. " Having complied with the provisions of Article 93 (1) of the Constitution of the Republic of the Republic, and because I have had to approve and sanction it; therefore, promulgate and take effect as the Law of the Republic. Santiago, 29 October 2014.-RODRIGO PENAILILLO BRICENO, Vice President of the Republic.-Alberto Arenas de Mesa, Minister of Finance.-Javiera Blanco Suárez, Minister of Labour and Social Welfare. What I transcribe to you, for your knowledge.-Saluda Atté. to you, Alejandro Micco Aguayo, Undersecretary of Finance. Constitutional Court Draft law establishing the Financial Stability Board, contained in Bulletin No. 9178-05 The Secretariat of the Constitutional Court, who subscribes, certifies that the H. Chamber of Deputies sent the draft statement in the Approved by the National Congress, in order for this Court to exercise the control of constitutionality with respect to the rules governing matters of the constitutional organic law that it contains, and that by judgment of 9 October 2014 in cars role No. 2.719-14-CPR. It is stated that the third paragraph of Article 1º; the second paragraph of Article 2 (1); the third paragraph of No. 2, and Article 11 of the bill are organic and constitutional norms. Santiago, October 9, 2014.-Marta de la Fuente Olguin, Secretaría.