Chile’s Financial Regulator Updates Rules for Credit Union Share Repurchases
The Comisión para el Mercado Financiero (CMF), Chile’s financial market regulator, has launched a latest public consultation regarding proposed regulations for Savings and Credit Cooperatives (CACs) regarding the return of membership shares to their members. This move, announced on February 17, 2026, aims to clarify the conditions under which CACs can make these returns, particularly in exceptional circumstances, aligning with Article 19 bis of the General Law of Cooperatives (LGC).
Strengthening Financial Stability Through Regulation
This isn’t a new initiative. The proposed regulations build upon a first round of public consultation and workshops with industry stakeholders. The impetus for these changes stems from the Financial Resilience Law (LRF), which granted the CMF the authority – with the agreement of the Central Bank of Chile – to establish requirements for CACs seeking exceptions to the LGC’s general prohibition on returning membership shares without a corresponding capital increase.
The CMF requires CACs seeking to return shares to submit a detailed plan outlining the process and its impact. This plan must demonstrate compliance with specific requirements, which will be formalized in a new chapter of the Updated Compilation of Cooperative Standards (RAN CACs).
Key Requirements for Share Repurchases
Several key conditions must be met for a CAC to be eligible for an exception. These include:
- Not being in early regularization or forced liquidation.
- Maintaining a solvency ratio exceeding 21% both before and after the share repurchase.
- Not having reported losses in the previous fiscal year.
- Not currently utilizing financing facilities from the Central Bank of Chile.
The new regulations also leverage provisions from the Sectoral Permits Law (Law No. 21.770), streamlining the approval process for CACs that meet all requirements.
Impact on Accounting Standards
The proposed changes extend to the Compendium of Cooperative Accounting Standards, impacting the presentation of monthly financial information and financial statements. This reflects a broader effort to enhance transparency and accountability within the cooperative sector.
Future Trends in Chilean Cooperative Regulation
These regulatory updates signal a trend toward greater oversight and standardization within Chile’s CAC sector. This is driven by a desire to bolster the overall stability of the financial system, as highlighted by the Financial Resilience Law. You can anticipate further refinements to the RAN CACs, potentially focusing on risk assessment, corporate governance, and capital adequacy, mirroring developments in banking regulations.
The emphasis on solvency ratios and restrictions on utilizing Central Bank financing suggests a cautious approach to share repurchases. This is likely to become a common theme in financial regulation globally, as authorities seek to prevent excessive risk-taking and maintain financial stability. The integration of the Sectoral Permits Law demonstrates a commitment to streamlining bureaucratic processes, which could serve as a model for other regulatory areas.
Pro Tip:
CACs should proactively review the detailed proposal available on the CMF website (https://www.cmfchile.cl/institucional/legislacion_normativa/normativa_tramite_ver_archivo.php?id=2026021760&seq=1) and prepare for potential adjustments to their capital management strategies.
Frequently Asked Questions
Q: What is the purpose of these new regulations?
A: To establish clear requirements for CACs returning membership shares, ensuring financial stability and protecting member interests.
Q: What is the Financial Resilience Law (LRF)?
A: A law designed to strengthen the stability of the Chilean financial system.
Q: Where can I find more information about the proposed regulations?
A: On the CMF website in the “Normativa en Consulta” section: https://www.cmfchile.cl/institucional/legislacion_normativa/normativa_tramite.php
Q: What is the RAN CACs?
A: The Updated Compilation of Cooperative Standards, which will be updated to include the new regulations.
Did you know? The CMF is actively seeking feedback on these proposed regulations, demonstrating a commitment to collaborative policymaking.
Stay informed about the evolving landscape of financial regulation in Chile. Explore our other articles on financial markets and cooperative finance for further insights.
