On Monday, January 8, the Financial Market Commission of Chile published general rule No. 501, which establishes the minimum mentions of the usual operations policies, as well as regulates the public dissemination of related party transactions.
The main provisions of NCG 501 are as follows:
Usual Transactions Policy
The habitual policy must contain the following:
- Date of approval by the Board of Directors and last modified.
- Justification to have standard operating policies and procedures.
- Characteristics and conditions to be met in transactions to be carried out by the standard operating policies and procedures (counterparties, maximum amount per transaction, and the ordinary nature of the transaction will be included, given the corporate business).
- Control mechanisms (approval and verification requirements) to which related party transactions will be subject within the framework of the standard operating policies and procedures.
- A compliance officer in charge of verifying the control mechanisms.
- Disclosure mechanisms.
Reporting of Related Party Transactions
Companies that fall within the scope of NCG (Norma de Carácter General – General Standard) 501 must prepare and disseminate a half-yearly report of the related party transactions that have actually been entered into by the company during the respective six-month period, regardless of whether or not carried out under the standard operating policies and procedures.
The report shall comply with the content specified in Annex I of the NCG and contain at least the following information regarding the transactions concluded, grouped by type of transaction and by counterparty:
- Date of Report
- Type of operation
- Operation Subtype
- Counterparty of transactions
- Total Amount Involved
- Number of operations performed
The aforementioned report must be published on the company’s website and available for consultation by any shareholder at its corporate offices for at least 24 months from its publication within the month following the six-month period in which is reported.
The provisions contained in the regulations in question will come into force from September 1, 2024. Entities with standard operating policies and procedures must adapt them to the provisions of these regulations. Such policies shall be approved by the Board of Directors and made publicly available no later than August 30, 2024.
