CMF defines when dissemination of content on Social Networks is Investment Advice

On July 5, 2024, the Financial Market Commission (“ CMF ”) updated the “Frequently Asked Questions” document associated with General Rule 502 (“ NCG 502 ”) that regulates the registration, authorization and obligations that financial service providers under Law No. 21,521 (“ Fintech Law ”) must comply with . The foregoing, for the purpose of establishing guidelines under which the creation and dissemination of financial and/or investment content through the media and/or social media constitutes investment advice under the terms established by the Fintech Law.

The document indicates that those who are dedicated to the creation and dissemination of financial and investment content, aimed at the general public or a specific and determined group of it, will be included within the regulatory perimeter of the Fintech Law, when two elements are cumulatively verified:

The communication of an evaluation or recommendation has the capacity and/or intention to influence the behavior of the audience regarding the convenience or not of making a certain investment.

As an example, the CMF cites several examples of cases that, in its opinion, constitute investment advice under this element:

• Make recommendations or assessments on the suitability of investing in publicly offered securities, financial instruments or investment projects (as these terms are defined in the Fintech Law).
• Make recommendations or investment evaluations on a specific market, indicating whether or not it is appropriate to invest through the assets indicated in letter (a).
• Promote the use of referral programs and/or offer discounts that constitute an invitation or incentive to carry out investment transactions on publicly offered securities, financial instruments or investment projects.
• To make and disseminate general or specific projections of the profitability of certain publicly offered securities, financial instruments or investment projects.

In order not to be included under this element, communications must be of a purely informative or educational nature, that is, they must contain information of an objective and neutral nature. The purpose of this communication must be solely to inform about specific and verifiable facts and/or provide conceptual content on financial matters.

Communication is carried out in a regular manner

Investment advisory services will exist when communications through the media and/or social media are carried out in a professional manner, on a regular basis and sustained over time. For these purposes, the “Frequently Asked Questions” document cites as an example the administration, production, publication and dissemination of content within a social network profile, through a podcast or audiovisual channel, and which is dedicated primarily, although not exclusively, to making recommendations or investment advice in the terms already indicated.