CHILE: Santiago Exchange Shareholders Approve Amendments to Exchange Regulations

Friday March 18 2016

On 17th March 2016, the Santiago Exchange´s shareholders approved by majority, the amendments of Statutes, a key step towards the process of demutualization in Chile`s main Exchange. The proposal of new Statutes voted in an extraordinary shareholders meeting contemplates –among others – the elimination of the requirement of having a Santiago Exchange share to participate as a Brokerage Member Firm. Likewise, it incorporates an ownership concentration limit of the Santiago Exchange, so that no person or legal entity, individually or jointly, can hold more than 25% ownership of the Company.

Also, a Corporate Governance reform was approved, with the obligation that at least three of the eleven directors are independent, with no affiliation to any brokerage house or the Exchange itself, as well as the creation of a Users’ Committee with the participation of issuers, investors and Brokerage Houses representatives, and the obligation of having its own Corporate Governance Code.

As part of the demutualization process, the Board of Directors will also enact new Bylaws of the Exchange. The Bylaws should keep the existing requirements for Brokerage Houses, except for the original requirement to hold a share of the Exchange, and the collateral, IT, operational risk and human resources requirements currently in place.

The replacement of the share ownership will require the signing of a new Brokerage Member Firm contract, with terms to be established by the Board.

The current share, used as collateral of each Brokerage Member Firm to back operations at the Exchange, will be replaced by new operational collateral that will be required to ensure the compliance of operations at the Exchange and with other Brokerage Houses. The new operational collateral requirement will be determined using risk calculation methods based on traded value and net worth of each Brokerage House, among other aspects. It is also planned to establish that the minimum guaranty should range from UF 20,000 to UF 100,000.

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