RULES THAT REGULATE FINANCIAL TECHNOLOGY SERVICES (FINTECH)
Resolution No. 001.21 of January 4, 2021, issued by the Superintendence of the Institutions of the Banking Sector, was published in Official Gazette No. 42.151 of June 17, 2021 (the “Resolution”). The Resolution contains the Rules that Regulate Financial Technology Services (FINTECH).
Following are the most significant aspects of the Resolution:
The purpose of the Resolution is to regulate the financial services provided through new technologies, offered in any of their forms by the Financial Technology Institutions to the Institutions of the Banking Sector, as well as their organization, operation, and functioning; also, the aspects to be considered by the Institutions of the Banking Sector in order to contract or enter into Strategic Alliances with these institutions.
The following definitions are among those established in the Resolution:
- Financial Technology Institutions of the Banking Sector (Instituciones de Tecnología Financiera del Sector Bancario – ITFB): Any national or foreign, public or private legal person authorized by the Superintendence of the Institutions of the Banking Sector to provide in the country the financial services prescribed in the Resolution, through the use of new technologies.
- E-wallet: Also known as digital wallet, payment wallet or mobile wallet. They are mobile applications that allow storing and making electronic transactions with digital currencies among users in order to obtain goods and services.
- Financial Technology (FINTECH): Financial solutions promoted by technology involving the financial services companies that use state-of-the-art technological processes and systems in order to offer innovative financial products under new business models.
In order to be organized as ITFB and operate as such an authorization is required, which will be issued by the Superintendence of the Institutions of the Banking Sector, upon the prior binding opinion of the Superior Entity of the National Financial System (Órgano Superior del Sistema Financiero Nacional – OSFIN). Said authorization must be requested by the interested parties through a communication addressed to the Superintendent of the Institutions of the Banking Sector. Also, a group of documents listed in article 9 of the Resolution must be filed.
The ITFBs must be organized as sociedades anónimas and meet the following requirements: (i) to include the initials ITFB in their corporate name; (ii) to have a minimum of 5 shareholders; (iii) to have a corporate purpose related to the performance of financial services provided through new technologies; (iv) to establish their domicile in the national territory; and (v) to have the minimum capital required to carry out the activities, which will be set in accordance with the prudential regulations to be issued by the Superintendence of Institutions of the Banking Sector (Superintendencia de las Instituciones del Sector Bancario – “SUDEBAN”) to that end.
Regarding the administration of the ITFBs, the Resolution establishes:
- The members of the administration of the ITFBs may not be subject to the disqualifications and prohibitions from performance of the banking activity prescribed in the Decree with the Status, Value, and Force of Law of the Institutions of the Banking Sector.
- At the time when the operations begin, the ITFBs’ corporate capital must be fully paid in cash and it must remain in this way during the exercise of the authorization granted.
The ITFB may offer financial services related to: (i) payment products and money storage; (ii) products within Bank Institutions; and (iii) new business models. Each of these points is broadly developed in the Resolution.
In the event of cessation of activities by the ITFB, it must request an authorization of the Superintendence of Institutions of the Banking Sector at least ninety (90) calendar days in advance of the date when final cessation is intended.
The Superintendence of the ITFB may suspend the authorization of ITFBs upon the prior binding opinion of the OSFIN in the following cases:
- The documentation and/or information requested are not sent within the period of time established.
- The requirements for performance of the authorized operations or activities are not met.
- False information is provided in relation to the registration or activities.
- The customers’ resources or the operation of the financial system is jeopardized.
- The suspension or partial limitation of its activities is ordered.
- Unauthorized activities are performed.
- The provisions of the Resolution and other rules regulating the matter are breached.
In the same terms prescribed for the suspension, the authorization of ITFBs may be revoked in the following cases:
- Repeated failure to perform the obligations and breach of the prohibitions established in the Resolution and other rules regulating the matter.
- Failure to follow the instructions issued by SUDEBAN.
- Failure to correct the situation that gave rise to a suspension during the time of the same.
- Performance of practices that affect or represent a risk for the national payment system.
- Suspension or abandonment of their activities for a period exceeding one (1) calendar year.
- Commencement of a dissolution, liquidation or bankruptcy process.
- Serious or repeated failure to comply with the terms of the authorization granted.
- The ITFB’s failure to carry out the activities for which the authorization was given.
- Failure to commence the activities in the period of six (6) months following the notification of the authorization granted.
The corporations that at the time of entry into force of these provisions carry out the activities prescribed in the Resolution must adjust to said provisions within a period of ninety (90) bank business days following their publication in the Official Gazette.
Breach of the provisions of the Resolution will be penalized in accordance with the Decree with the Status, Value, and Force of Law of the Institutions of the Banking Sector, without prejudice to the administrative measures and instructions that may be imposed by SUDEBAN.
The Resolution became effective upon publication of the same in the Official Gazette.
In order to access the Decree, please click here.
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